Central Banking
IMF paper says ageing populations are dampening impact of monetary policy
Working paper says monetary policy is becoming less effective in advanced economies undergoing demographic shift; calls for policy-makers to adapt
Obstfeld: Weak ex ante financial constraints prompt 'bad equilibria' in markets
Absent adequate fiscal space, financial instability will lead to price instability or sovereign default, which will further impair the functioning of financial markets
US jobs data disappoint raising doubts over September taper
Unemployment fell to 7.3% in August, but modest improvement in jobs data eclipsed by big negative revisions of June and July figures; analysts split over how numbers affect Fed's decision to taper QE
Mersch backs close relationship between monetary and macro-prudential policies
ECB executive board member says policies should take one another into consideration and exploit informational synergies; LSE academics concerned by politicisation of macro-prudential frameworks
Bank of Italy's Visco calls for full-fledged political union
Beyond banking union, the scope of a common eurozone budget - as well as the timeframe for its implementation - must be defined, says governor of Europe's fourth-largest economy
G-20 leaders vow co-operation to avoid monetary policy spillover
St Petersburg summit sees IMF concede advanced economies are now the major engines of global growth; European banking union is a top priority in the G-20's joint ‘action plan'
FOMC policy rate guidance pushes up US equity prices
Netherlands Bank research paper finds policy rate guidance also leads to significant reduction in implied volatility for US government bonds
Surpluses of Germany and China feed global imbalances, BIS research finds
Bank for International Settlements paper compares current account and creditor positions of Germany and China, finding Germany’s surpluses to be more resilient in the face of the global financial crisis
FSB flags up financial reform concerns
Financial Stability Board reports on progress of financial reforms to G-20 leaders; details the ‘serious problems’ emerging in some areas of national policy implementation
FX now a $5.3 trillion per day market, says BIS
The latest BIS triennial survey shows the UK has strengthened its grip on the FX market, while USD/JPY has seen a strong increase in trading activity
Fed minutes ‘significantly affect’ US asset prices
New York Fed economic policy review finds that US asset price volatility increases when the Fed releases minutes from policy meetings, but less so since FOMC has become more transparent
ECB holds rates as Draghi is ‘caught between doves and hawks'
ECB sticks to forward guidance as eurozone recovery deemed too 'green' to warrant a tightening of policy; announcement is imminent on the single supervisory mechanism
Fed presidents opposed as September meeting nears
John Williams backs reducing asset purchases ‘later this year’ while Narayana Kocherlakota says the Fed should be providing ‘more stimulus… not less’
Customers of failing banks less likely to trust other people
DNB working paper says mistrust prompted by experience of crisis increases likelihood of bank runs and undermines long-term growth
Implicit government guarantees leads to increased risk-taking at banks
Fed discussion paper argues that strengthening market discipline by reducing bank complexity is needed to address moral hazard
Riksbank holds rates as IMF sees ‘sizeable' risks at Swedish banks
Interest rates held at 1% as Swedish central bank attempts to support growth without adding to household debt stock; IMF Article IV report frets over large and vulnerable financial system
BIS economists find Fed's QE helps curb tail risk perception
Paper published today finds the effect of the Fed's announcing unconventional monetary policy measures is strongest when used in conjunction with forward guidance on low interest rates
BoE and BoJ shun further easing as economic activity picks up
Both the Bank of England and Bank of Japan keep their interest rates and asset purchases unchanged as their respective recoveries work up a head of steam
NY Fed staff say effect of policy changes depend on risk environment
New staff report argues that macro policy announcements affect asset prices to different extents depending on the existing economic outlook; when risk is elevated, the impact is reduced
Haldane says central banks have ‘further to go’ to improve communication
Bank of England executive director Andrew Haldane says policy-makers are still searching for a language that resonates with the general public
Central banks are getting more transparent, study finds
Study conducted by Barry Eichengreen and Nergiz Dincer finds trend towards greater transparency was not knocked off course by the financial crisis; independence, however, is more patchy
Financial crisis caused significant shift in the euro area Beveridge curve
ECB paper finds that labour market consequences of the crisis have been heterogeneous across countries, with Spain and Germany diverging the most
RBI's Rajan sets out vision for ‘inclusive development'
India's new central bank governor hits the ground running, outlining several concrete policy measures ranging from a short-term forex swap window to national savings instruments
IMF paper considers impact of China’s capital account liberalisation
Researchers suggest that reduced capital control will likely lead to net outflows from equity and bond markets as domestic investors look to diversify