Central Banking
Central Bank of Paraguay reduces inflation target to 4.5%
After keeping inflation around 5% for the past three years, the central bank will now aim to shackle it at 4.5% in 2015 and 2016
Russian central bank 'prepares' to recapitalise banks
Central bank announces package of measures to safeguard credit institutions from currency crisis fallout; finance ministry reportedly sells own foreign exchange
Chilean study identifies ‘delicate’ relationship between prudential policy and bailouts
Liquidity requirements and prudential taxes are examples of prudential policies that may backfire, since they can increase the risk taken by banks in expectation of a bailout, research finds
Bosnia central bank suspends nine after $380,000 theft from vaults
Prosecutor’s Office detains a central bank ‘clerk’ in connection with offence; money was supposedly taken in three chunks between 2012 and 2014
Bank of Israel researchers propose exchange rate-based forward guidance
Researchers say forward guidance has a mixed track record, especially in small open economies, but linking guidance to external factors would help improve credibility
Caruana sees leverage ‘evolving’ at global level
BIS general manager highlights risks beyond the banking sector, including an increase in corporate leverage in the wake of the financial crisis
Bank of England MPC still split 7-2 on rates
Minutes from the December meeting show Ian McCafferty and Martin Weale voted for a 25bp hike for the fifth consecutive month; they argue wage growth could ‘pick up sharply’
Robert Pringle's Viewpoint: The global finance system is in bad need of repair
Muddling through is not enough: neglect of global money can trigger political earthquakes that sweep away any chance of reasonable debate and compromise
Australian banks look to stable deposits to meet LCR, says Debelle
Interest rates on more stable deposit products are rising as banks prepare for liquidity coverage ratio’s January deadline, says Reserve Bank of Australia assistant governor
Ingves: Riksbank prepared to launch currency interventions
Swedish governor says central bank prepared to take unconventional measures, including negative interest rates and asset purchases, in light of falling oil prices
Czech National Bank advises against joining ERM II in 2015
Central bank says the government should not set a target date for entry into the eurozone; raises concern over pace of economic convergence and costs of joining
Credible fiscal plans reduce pressure on sovereign bond market, study finds
A credible macro-fiscal framework ‘can lead to stable expectations’ around a country’s sovereign bond market, reducing its expected risk premium, ECB paper finds
Ruble plummets despite 650bp hike by Bank of Russia
Second interest rate increase in four days does little to stem currency's precipitous decline; analyst calls central bank's apparent reluctance to intervene in forex markets a ‘game changer'
First BoE stress test uncovers capital shortfall
One UK bank failed the Bank of England's stress test scenario and two more have had to raise additional capital; Carney says future tests may be less forgiving
Bonnici disappointed by TLTRO take-up in Malta
Central Bank of Malta governor Josef Bonnici says it "would be a pity" if the country’s banks did not take advantage of the cheap funding on offer
FCA director says breakdown in controls led to communications blunder
Clive Adamson says FCA has taken steps to improve internal procedures; tells MPs the organisation can struggle to operate in a crisis
Signs of reflation in Japan as Abe sweeps back to power
Tankan survey shows degree of optimism among businesses and potential for rising wages in coming months, although evidence is mixed; Shinzo Abe reclaims supermajority in election
SBP annual report highlights ‘two phase’ year
Pakistan’s economy suffered turbulent spell in 2013, but IMF agreement saw a return to relative stability; central bank praises government for ‘long-awaited’ return to fiscal discipline
External imbalances predict exchange rate returns, finds SNB paper
Deviations from trends in Swiss net foreign assets and net exports indicated how nominal exchange rate will move in the future, according to a Swiss National Bank working paper
IMF paper suggests Peruvian forex interventions are asymmetric
The Central Bank of Peru has tended to react differently in the face of appreciation and depreciation pressures, research finds
Fischer questions FSB's democratic credentials
Fed vice-chair says Basel body not democratic ‘in a certain sense' but still a ‘great success'; argues it was set up specifically to circumvent IMF bureaucracy
UK payments regulator may use powers to force innovation
Payment Systems Regulator emphasises its "strong" powers over industry and says it will not hesitate to use them if firms fail to collaborate on innovation
RBNZ takes next step towards replacing settlement systems
The Reserve Bank of New Zealand is seeking registrations of interest from potential vendors to replace its current payment and settlement systems, NZClear and Esas
IMF: Uganda cut policy meetings to improve forecasts
Bank of Uganda now sets policy once every two months in an effort to base decisions on "firmer" data; the ECB will hold eight meetings in 2015 with the BoE set to follow suit in 2016