Central Banking
Global factors harming domestic policy transmission in Asia, IMF research finds
Authors find global factors help to explain why bank funding in Asian economies has such a limited role in transmitting monetary policy
Chicago Fed president wants more evidence of inflation
Evans backs an ‘extra-patient approach’ to monetary policy as he airs concerns over inflation outlook and ‘asymmetric’ risks; assesses economy more cautiously than FOMC colleagues
BoE paper extracts inflation expectations from market rates
Market rates are an imperfect measure of expected future inflation, say economists, who break them down into constituent parts, stripping out risk premia and the ‘wedge’ between RPI and CPI
Botswana research weighs impact of various instruments on credit
While interest rates may be more effective at influencing credit than reserve requirements, more ‘direct’ macro-prudential measures could be even better, Botswana article finds
Trichet says banks must keep ‘hammering’ at their culture
Progress towards improving culture and behaviour at banks is uneven, and the G30 is calling on the laggards to catch up; Central Banking asked members what still needs to be done
Reserve Bank of India ‘front-loads’ easing with 50bp cut
Rajan points to deterioration in global outlook and desire to boost investment; RBI will now focus on improving the transmission of cumulative 125bp reduction in key rate
Kuroda unfazed by ‘somewhat stagnant developments’
Japan’s economy has been through a summer lull but the BoJ chief insists it will bounce back, with inflation set to rise as expectations shift and low oil prices pass through
FSB agrees final TLAC principles but asset management work has way to run
Meeting in London sees the organisation agree final draft principles for total loss-absorbing capacity, as new branches of research into asset management risks sprout
Noyer wants tailored approach to shadow bank regulation
Banque de France governor highlights the risks of a ‘one size fits all’ approach to regulation across the banking and shadow banking sectors
‘Little support’ from data for theories of disconnect between trade and exchange rates, IMF report says
Data largely supports conventional economic wisdom linking movements in trade flows with levels of exchange rates, according to WEO chapter; Japan may be an exception
Global indicators can boost inflation forecasts in short term, paper finds
Author uses global inflation indicators and Brent oil price to augment domestic inflation forecasts in 523 countries, finding both improve accuracy
Colombia doubles value of largest banknote
Colombian central bank will issue new 100,000 note for the first time alongside five redesigned denominations in 2016
Irish central bank may spread higher levy on finance industry over time
The Central Bank of Ireland may spread the proposed increase in its annual levy on the financial industry over several years, but it still backs the call for non-banks to meet 100% of costs
RBNZ reveals adjustments to ‘tight budgetary framework’
Central bank cuts 15 positions in preparation for new funding agreement; talk of an ‘offshore office’ put on ice last year as operating expenses ran over budget
IMF staff calls for ‘comprehensive strategy’ on non-performing loans
IMF staff call for creation of asset management companies to free up European banks from distressed debt; cites Spain as good example
Macro-prudential institutions were designed too hastily, Tucker warns
Group of economists including former BoE deputy warn macro-prudential policies are too poorly understood and were too hastily assembled to be effective, outlining possible enhancements
Lithuanian paper explores macroeconomic imbalances
Working paper advocates a more refined analysis of the misalignments in current accounts and real effective exchange rates for the macroeconomic imbalance procedure
Irish deputy Stefan Gerlach steps down early
Academic economists praise Gerlach, who was seen as ‘outside appointment’ who improved bank’s research and data provision; deputy had decided not to apply for governorship
Charlie Bean expects natural rate to change course
Former BoE deputy believes evidence points to a gradual rise in the natural rate of interest; suggests government is better placed than central bank to solve zero lower bound problem
BoE’s FPC says no immediate action required on buy-to-let
Bank of England financial policy committee is ‘alert’ to impact of buy-to-let loans on the housing market and overall financial volatility but finds no ‘immediate’ case for action
ECB paper considers how to mitigate US spillovers
Global economies could mitigate their vulnerability to US monetary policy decisions through a range of different policy actions, research finds.
Taiwan cut seen as start of easing cycle
Prompted by negative inflation and stalling growth amid China slowdown, the central bank cuts rates for first time since 2011
UK banks won't face FRTB capital hike – BoE official
Policy expert says most trading risks already captured under Pillar 2 framework
Norway signals further easing as it cuts again
Norwegian central bank looks to cut rates further with inflation set to fall back to 2% over the forecast horizon