Central Banking
Mexico hikes rates to stabilise peso depreciation
Bank of Mexico surprises markets with 50bp hike to stem currency depreciation; analysts see global risk factors contributing to exchange rate developments
Asian central banks shift bond funds towards local currency debt
Eleven East Asia-Pacific central banks agree to close fund for buying US dollar debt issued in the region and invest the money in local currency debt instead
Bhutan readies to sharpen ‘blunt’ policy instruments
Royal Monetary Authority of Bhutan considering improvements to policy transmission; could involve new lending and deposit windows, departure from current base rate practices
DMO will not change course after Brexit vote
Head of the UK Debt Management Office stresses principles of predictability and transparency ahead of gilt auctions next week; market reaction to S&P’s downgrade was “extremely muted”
Monetary easing ‘likely’ required over summer, says Carney
Governor expects easing in wake of UK vote to leave the EU; announces additional weekly liquidity operations as part of response, but acknowledges limits to what BoE can achieve
Mersch stresses importance of democratic legitimacy in Europe
Executive board member at the ECB wants to see the decision-making process in Europe enhanced; calls for a “shared EU-wide identity”
Two banks fail Fed’s annual stress tests
Most bank holding companies pass the Comprehensive Capital Analysis and Review, but Deutsche Bank Trust Corporation and Santander Holdings USA pulled up for “substantial weaknesses”
IMF paper examines factors affecting US wage growth
US labour market changing “more fundamentally” than before, author finds; wage growth expected to accelerate in near term
Central bank should consider sticky-price inflation as target variable – paper
South African working paper argues central bank should consider sticky price inflation as target variable; sticky prices more persistent and less volatile
EBA chair calls for ‘deep-rooted changes’ in bank culture
Andrea Enria, writing in the Directory of Financial Regulators 2016, says more must be done to confine episodes of misconduct to the past
People: Sarb gets new comms head; Bulgaria and Portugal welcome new board members
Jabulani Sikhakhane joins South African Reserve Bank; Bank of Bulgaria gets new board member, while Bank of Portugal gets two
State Bank of Pakistan sees financial sector ‘flourish’
Financial stability review highlights record after-tax profit and high capital adequacy ratio, as well as improvement in asset quality
Eastern Caribbean ACH enters second phase of implementation
ECCB annual report sets outs progress so far; electronic payments and US dollar cheques to be processed through the Eastern Caribbean Automated Clearing House
Sweden’s FI gauges impact of debt-to-income limit
Financial regulator tries to attach values to the growth and stability impact of DTI limits, one potential tool for tackling rising household indebtedness
Mario Vella ‘expected’ to be new Maltese governor
Economist ‘expected’ to be in post on July 1, as it is considered ‘unlikely’ president will object to prime minister’s choice; opposition party is not happy with choice, however
CPMI-Iosco launch plan for two-hour cyber attack recovery
First internationally agreed guidelines for cyber resilience tell FMIs to plan for resumption of services within two hours of an attack; firms will have 12 months to prepare
Russian public to vote on new banknote designs
The 200 and 2,000 ruble notes will bear symbols of Russian cities voted on by public; winning designs announced in October 2016, notes to enter circulation in 2017
Fed’s Powell sees potential for ‘new headwinds’ in Brexit
Governor says global risks to US outlook have increased in the wake of the UK’s vote to leave the EU
Effective lower bound has ‘tail risk’ influence on monetary policy, ECB paper argues
The ‘tail risk’ induced by the possibility of rates reaching their effective lower bound can cause serious undershooting of inflation targets, an ECB working paper argues
Draghi: Central bankers must align policies
ECB president calls for greater alignment and better communication of economic policy across national borders; calls for globally co-ordinated fiscal expansion on lines of 2008-09
Dombret warns clearing and securities depository business may leave London
Bundesbank’s Andreas Dombret said London’s pull as a venue for euro trading would “shrivel” if the UK voted to leave the EU; warned EBA would need to find “new home”
IMF’s Lipton stresses importance of multilateralism
IMF first managing director calls for co-operation between emerging markets and advanced economies to help foster growth in the wake of Brexit
Reserve Bank of Malawi to improve monetary policy architecture
Bank moves towards fully fledged inflation targeting, embracing interest rate-based framework; IMF staff note importance of maintaining tight monetary policy
Ukraine unveils new asset disposal system in bid to reduce corruption
Anti-corruption campaigner joins central bank governor and other officials in announcing move towards unified online system for selling assets of insolvent banks