Central Banking
Bank of Israel staff get bump in wages
Recently struck deal raises salaries by 1.78% and also increases wages retroactively for 2012 and 2013; governor Flug recently recieved 50% pay increase after push by former governor Stanley Fischer
Turkish prime minister praises central bank rate hold as lira falls to record lows
PM's comments following bank's decision to keep rates at 7.75%, despite a sharp drop in the lira's value in the past month, raise questions about government's role in monetary policy decision-making
IMF says world economy menaced by US taper and eurozone deflation
Eurozone deflation should be combated by every means available to the ECB, IMF says; emerging market risks from US taper will be overshadowed by benefit from advanced economy growth
People: Zambian deputy retires; Lautenschläger appointed at ECB
Bank of Zambia and Bank of Nigeria lose deputy governors to the ministry of transport and retirement respectively; Sabine Lautenschläger will join the ECB executive board on January 27
PBoC delivers on cash injection promises
People’s Bank of China uses standing lending facility and reverse repos to inject in excess of $37 billion into interbank market; releases statement to prepare market participants ahead of time
Portuguese paper finds banks lend to riskier borrowers when policy rates are low
Researchers find evidence supporting the existence of the ‘risk-taking channel’ of monetary policy; banks will grant more loans to companies with recent defaults when rates are lower
RBA inflation target mitigated terms of trade macro shocks
Researchers at the Reserve Bank of Australia argue that the country’s inflation targeting framework helped to mitigate the macroeconomic consequences of the recent terms of trade boom
Household borrowing not caused by income inequality, Richmond Fed paper argues
Finds low-income households in high-inequality regions accumulated less debt relative to income than their counterparts in lower-inequality regions; rebuts 'wish to keep up' as driver of credit demand
BoE's Miles finds market context decisive for QE impact
Impact of QE working through a portfolio rebalancing channel is weak in an environment of 'functioning financial markets'; implications for purchases made in dysfunctional markets unclear
BoE's Broadbent examines UK economic growth conundrum
MPC external member says real wages have fallen due to specific economic 'headwinds', which are now beginning to abate; productivity is also on the rise, he says
Chinese labour costs set to play significant inflation role
Researchers suggest that increases in labour costs do not pass ‘fully’ through to prices in China; warn this could change on the back of ‘recent sizeable growth’ in nominal wages
Sri Lanka overhauls banking sector
Central Bank of Sri Lanka reveals plans to concentrate financial assets in the hands of five banks, and reduce the number of non-bank financial institutions by almost two-thirds
IMF warns recapitalisation of Slovenian banks is a 'stop-gap solution'
Report urges deeper reforms of under-capitalised corporate and banking sectors; says ECB comprehensive risk assessment expected later this year could expose additional capital shortfalls
Bank of Italy slims down organisational structure
The central bank will consolidate its various operations into eight directorates general on January 27, in a bid to ‘streamline’ its organisational structure and decision-making processes
Kohn says Fed's independence 'at risk'
Former Federal Reserve vice-chairman Donald Kohn argues the institution's autonomy has been undermined by recent policies; lists four explicit threats in paper published by the Brookings Institution
Paul Tucker laments 'faltering vigour' of international reform
Former BoE deputy governor argues there is 'less coherence, faltering vigour and conflicting views about how different national regimes should apply to inherently international markets'
Fed's Williams says ‘highly effective' forward guidance has a ‘number of limitations'
San Francisco Fed president defends the policy's record in a paper written for the Brookings Institution, but also says it is ‘prone to misinterpretation'
Knot backs advanced economies to buck secular stagnation
Netherlands Bank president Klaas Knot says a period of technological change will stop advanced economies from sliding into a new era defined by lower growth rates
Central banks in Israel, UK close in on new deputies
Bank of Israel governor Karnit Flug nominates academic Nadine Baudot-Trajtenberg as her deputy; UK Treasury begins process of replacing Charles Bean at the Bank of England
Dombret says 'ultra-loose' monetary policy won't fix 'lacklustre' investment
Andreas Dombret says financial and structural reforms are necessary to incentivise private sector investment; banking union will not solve the economic crisis in the eurozone
Bank of England launches new liquidity provision framework
First ‘indexed long-term repo operations' under framework unveiled in October scheduled for early February; will provide ‘more liquidity at cheaper rates, longer maturities against wider range of collateral'
SNB's Jordan: 'Transparency can be counterproductive'
Chairman of the Swiss National Bank calls for central banks to take ‘great caution’ before making changes to their communications policy; expresses scepticism over board minutes and forward guidance
History likely to vindicate Fed's crisis policies, says Bernanke
The Federal Reserve has developed ‘all the tools needed' to manage monetary policy; costs of extraordinary measures exaggerated, Bernanke says
New collateral framework will have a ‘limited’ impact on banks, says DNB
Dutch central bank imposes tougher collateral requirements on the banks that use its services; more stringent than the wider Eurosystem, which has made a number of accommodations in recent years