Central Banking
BoE’s Forbes studies generation of ‘global tsunamis’
External MPC member asks why some global shocks have major consequences and others do not, seeking answers in countries’ financial linkages, common shocks and contagion
RBA’s Lowe: we are not ‘inflation nutters’
Philip Lowe underscores central bank’s “balanced” approach to controlling inflation in his first public appearance as RBA governor, and highlights other initiatives
Swift unveils software to help users detect fraud
Financial messaging service hopes new software will allow users to independently detect unusual activity; software to be launched in December this year
Fed holds but two more dissenters call for hike
Case for hike is building, says Janet Yellen, but economy has “a little longer to run”; two more FOMC members join Esther George in voting for hike
Eurozone employment-to-GDP-growth ratio has recovered strongly – ECB
Employment growth concentrated in Spain and Germany; productivity remains “stagnant at pre-crisis levels”
Central Bank of Kenya cuts rates despite new credit legislation
Commercial banks to amend lending rates again following a cut in interest rates; bank launches 50th birthday initiatives including new website
IMF lauds renminbi SDR launch, but some see momentum stalling
Fund officials praise China’s proactive approach to meeting SDR goals, but others warn progress on renminbi internationalisation may be slowing
RBA’s Heath highlights changing nature of Australian workforce
Automation, ageing population and decline of industry are reshaping the labour market’s demand for skills, head of economic analysis says, with lessons for central bank recruiting
Declining inflation reduces pass-through effects for emerging markets – BIS paper
Central banks should be less fearful of floating their exchange rates; emerging markets should take note exchange rate channel could be “less effective” in affecting inflation
BoJ targets inflation overshoot with revamped policy approach
Shift to “yield curve control” could give the central bank more room for manoeuvre on asset purchases, as it promises to keep easing until inflation exceeds the target
Liquidity stress testing ‘essential’ – ECB supervisor
Supervisor warns conference that banks will need to shape up their internal liquidity adequacy assessment process responses for 2017
Savers must adjust their plans amid low rates – Poloz
Bank of Canada governor illustrates harsh reality for savers with rates so low, underlining the need for people to put aside more funds or work for longer than anticipated
Russian central bank closes eight lenders and reports alleged crimes
Six banks and two credit institutions were shuttered by Russia’s central bank in September; dossiers on alleged “crimes” at six more sent to prosecutors
BIS research seeks to forecast global inflation
Economist builds global inflation forecast using country-level survey forecasts, finding it can be used to improve domestic inflation projections in some countries
BoE’s Hauser foresees end to fragmented post-trade structures
Central bank is supporting a movement away from “complex and balkanised” securities services as it looks to revamp infrastructure and encourage innovation
Reserve requirements complement monetary policy in small open economies – paper
Paper examines the use of indirect and direct monetary policy instruments in three Caribbean economies; increases in the reserve ratio are successful in reducing private sector credit
ECB paper examines use of eurozone bank lending survey
Changes in credit standards in the ECB’s bank lending survey serve as leading indicators for GDP and bank loan growth, researchers say
Indonesia to launch new banknote and coin series with a ‘bang’
New banknote and coin series featuring Indonesian “national heroes” to launch later this year; smallest coin will not feature in new series
HKMA to launch cyber security training framework in December
New technology has made cyber security more important than ever, says Chan; HKMA to widen pool of talent as part of new initiative to be rolled out at the end of the year
Irish central bank announces major internal reorganisation
Bank will split market supervision department in two and create new financial stability directorate; full-time director of corporate affairs to be appointed
Target2 balance surge not a sign of eurozone ‘stress’ – ECB’s Praet
European Central Bank’s chief economist says €400 billion increase in outstanding euro real-time gross settlement claims is largely due to ECB’s asset purchases, rather than eurozone weakness
Post-crisis banking regulations increase large firms’ funding advantage – paper
Banque de France working paper presents a large-scale DGSE model with large and small firms to analyse the impact of new banking regulations
China has room to regulate local government financing – IMF paper
Government can and should rein in fiscal risks posed by public-private partnerships, authors say, as they outline “four pillar” regulatory framework
Norges Bank paper studies forecast asymmetry at lower bound
Effective lower bound need not translate into asymmetries in other forecast variables, authors find; regime-switching DSGE model helps overcome Lucas critique