Central Banking
Balance sheet policy matters for credibility – Norges Bank paper
Researcher argues a central bank’s financial strength may affect its ability to meet its monetary policy mandate, based on evidence from the UK’s gold standard period
Nouy sees need for rethink of reporting systems
Danièle Nouy says new thinking is needed to help banks and supervisors deal with a ‘paradigm shift’ in data collection; European reporting framework for all banks should be considered
Sarb faces tough job amid ‘sobering’ outlook, IMF warns
Capital flows, sovereign rating and financial sector health form dangerous links, fund says, though South African authorities stress they have made preparations
Post-Brexit gilt auctions met with strong demand
Trends in gilt yields show UK debt still seen as ‘safe haven’ asset, says one analyst; others attribute strong demand in this week’s auctions to range of factors
Technical issue affects Fed minutes release
Error in Federal Reserve equipment results in early release in some cases and late in others; minutes show Fed officials grappling with uncertainty amid slowing job growth and UK referendum fallout
RBNZ weighs tighter macroprudential policy and wider toolkit
Reserve Bank of New Zealand considers use of debt-to-income ratios to calm housing market, consultation with banks to occur before implementation
Sarb deputy sees tail risks from Brexit but expects storm to calm
Daniel Mminele sees tail risk coming from asset liquidation by UK corporates and investment funds, but if clear communication is given, the ‘storm is likely to calm’
US Phillips Curve “not broken” – IMF paper
Working paper finds economic behaviour since the crisis reflects different sources of disturbances, and not a change in the dynamics of the Phillips curve
BoE part-way to meeting Carney’s strategic vision – annual report
Central bank is reshaping its operations to meet ‘One Bank’ plans and comply with its new obligations under the UK’s senior managers regime, annual report says
European banks suffer as regulators ban Monte dei Paschi short-selling
Banks hit by further shockwaves from UK’s vote to leave EU, while European authorities scramble to shore up crumbling Italian bank Monte dei Paschi di Siena
Granular data aids policy transmission understanding, Draghi says
ECB president highlights “very rich information set” launched this week; involves reporting data on up to 35,000 daily transactions in the money market
IMF staff call for greater Pakistan central bank autonomy
Significant progress made but further effort regarding legal amendments still needed, IMF report says; State Bank of Pakistan working on legislative action plan while executive orders fill gap
Fed’s Tarullo looking for more evidence on inflation
Daniel Tarullo wants to see more convincing evidence that inflation is returning to target before tightening monetary policy; headline and core PCE inflation are still below target
Annual inflation in Argentina at 40.3% by year-end, markets say
Inflation seen slowing to less than 16% by end of 2018; results published in new expectations survey, relaunched after the central bank studied examples from abroad
Riksbank tweaks forward guidance, citing Brexit uncertainty
Swedish central bank says it will likely only raise the policy rate from the second half of 2017 onwards; highlights “considerable uncertainty” abroad
Italian banking system sees first major test of European bail-in regime
Leaked letter from ECB triggers sell-off in major Italian commercial bank; European and Italian authorities still fail to reach agreement on resolving NPL problems
Policy-makers should base analysis on broad set of monetary aggregates, paper argues
Analysis of the stability of demand for components of monetary aggregates in the eurozone argues against reliance on a single measure, researcher says
Colombian paper explores forex intervention announcements
In present of imperfect credibility it is not possible for central banks to achieve ‘desired’ exchange rate level without changing international reserve position, paper finds
Sri Lankan governor stresses integrity in first speech
Indrajit Coomaraswamy suggests his primary responsibility is upholding the central bank’s reputation and credibility; praises “iconic figures” of the past as he takes office
Nigerian regulator overhauls management of major local bank
Nigeria’s central bank enforced a change of management in a domestically systemically important bank due to liquidity and capital adequacy concerns; finance veterans appointed to top roles
Report calls for co-operation in appraising macroprudential tools
Research led by Anne Le Lorier for Basel Committee on the Global Financial System says governance arrangements should promote “wider co-operation”
Swift paper warns not to transplant Kenya’s inclusion strategy
Harvard Kennedy School lecturer explores the factors behind M-Pesa’s success in Kenya, and warns against simply copying the country’s approach to inclusion elsewhere
Bank of England cuts CCB to 0% to support credit supply
In wake of Brexit uncertainty, concerns over supply of credit ‘taken off the table’ says Carney; new buffer rate to give confidence to UK economy that banks can lend in ‘challenging times’
BiH central bank preparing for long road to EU membership
Central bank is looking to build its capabilities and expand staff to help support Bosnia and Herzegovina’s bid for EU membership, says governor