Central Banking
Bank of Russia presses ahead with rating agency plans
Russian central bank governor Elvira Nabiullina says banking sector is ‘safe’ and economy will soon have its own financial ratings agency and electronic payment system
UK regulators spare Co-op Bank £120m fine
Bank of England and FCA ‘censure’ the troubled bank for multiple failures including not being open with regulators, but drop a £120 million fine on financial stability grounds
PBoC opens renminbi up to market forces
Latest move towards liberalisation appears to be aimed at meeting criteria for inclusion in SDR basket, but also provides stimulus to flagging economy
Change to broken benchmarks years away, say industry commentators
After the FCA produced a review criticising banks for not learning the lessons of Libor and forex, observers predict no major benchmark reform until efforts co-ordinated with industry
RBI paper explores challenges in public debt management
Research identifies a ‘narrow investor base’ as one hurdle and considers how to encourage greater participation from retail investors in the market for government securities
Lockhart says Fed liftoff is ‘close’
Atlanta Fed president highlights ‘cumulative evidence’ of economic recovery and says he is willing to sanction the first rate increase in the face of ‘mixed data’
Sarb governor airs concerns over inflation expectations
Lesetja Kganyago says the five-year inflation expectations of analysts, business people and trade unionists are ‘uncomfortably close’ to top end of inflation target
Icelandic paper looks for early-warning signals across past crises
Working paper identifies six clusters of financial crises in the country since 1875; finds macroeconomic variables give a ‘more robust warning signal’ than financial alternatives
CLS develops cleared FX settlement service with LCH.Clearnet
Designed specifically for central counterparties and cleared FX products, the service aims to minimise risk in the industry
Uganda raises rates again to tackle inflation risks
Bank of Uganda hikes its policy rate to head off inflationary pressures but analyst warns the move will be ineffective unless overnight rates on the interbank market respond
Bank of Canada paper flags risk of spillovers from emerging to developed economies
Researchers show how a search for safe assets could transmit instability to developed economies as capital flows out of emerging markets
End of sanctions could be double-edged sword for Iranian banks
Iran central bank vice-governor warns domestic banks have work to do before they are opened up to international competition, but Iranian investors see end of sanctions as broadly positive
PBoC revamps 100 yuan note
New versions of China’s highest denomination note include improved security features to fight counterfeiting and improve machine-readability
Lobbying softens regulatory treatment of distressed banks in US, paper finds
Under-capitalised US banks are less likely to be rigorously supervised if they have exercised political or regulatory influence, a working paper published by the ECB finds
Hungary leads host of new central bank websites
Central Bank of Hungary redesigns main site and launches separate Budapest RMB Initiative hub; Barbados, Qatar and Saudi Arabia institutions among others to update online presence
Swedish deputy wants macro-pru tools for non-banks
Policy-makers must develop new macro-prudential tools for addressing risk in the non-banking sector, warns Sveriges Riksbank’s Cecilia Skingsley
US rate hike still a possibility after ‘solid’ jobs data
Federal Reserve still on track to hike rates later this year, possibly as soon as September, after latest jobs data shows 215,000 increase in nonfarm payrolls
NBIM report urges stock exchanges to prepare for next phase of development
Technological and regulatory changes have led to faster, more fragmented markets, and stock exchanges need to adapt if they are to keep up; latency race to zero is a ‘dead end’, says fund
ECB researchers examine flight to safety during sovereign debt crisis
Working paper tracks geographical distribution of capital flight, finding different movements by intra-eurozone and external investors; movements ceased when OMTs were unveiled
Spanish paper puts crisis legacy into context
Working paper suggests long-run trends in population and productivity growth could hamper the ability of policy-makers to address the legacy of the crisis
Greek deflation continues to bite
Official data shows prices falling by 1.3% in July while house prices continue a steep decline
BIS economists warn of emerging market policy dilemma
Emerging markets are increasingly exposed to monetary policy in developed economies, transmitted via lower long-run rates, and it is not clear what central banks can do about it
African central banks must heed changes to inflation drivers, study argues
IMF working paper argues policy-makers in sub-Saharan Africa may have to pay more attention to inflation now demand shocks exert greater influence on prices
Chile and IMF divided on potential growth
Latest staff report reveals difference in views on long-term growth of the Chilean economy, in line with earlier comments made by the central bank governor