Central Banking
Low correlation between relative consumption and price not due to market inefficiency
Central Bank of Luxembourg paper attempts to explain why the correlation between real exchange rates and relative consumption is either low or negative
Peter Praet delves deeper into ECB forward guidance
The ECB executive board member explains why the central bank issued forward guidance and how it will work; emphasises the importance of money dynamics in determining future policy
South African market inefficiencies keep ‘insiders happy and outsiders out'
Sarb deputy governor Francois Groepe says speedy implementation of key proposals in the National Development Plan would be a good start for spurring more inclusive growth
BIS banking department deputy makes switch to State Street OIG
Founder of State Street's Official Institutions Group John Nugée will retire in October, and be replaced by Louis de Montpellier of the BIS
Kenyan central bank defends depreciating shilling
The Kenyan shilling has dropped almost 5% in value against the dollar since May; central bank insists this is a necessary rebalancing and does not pose any damaging inflationary pressures – yet
German paper proposes new method for identifying time-invariant regressors
Discussion paper says existing techniques used to identify time-invariant regressors in dynamic panel data models are ‘quite biased’ and proposes a two-stage alternative
Sarb issues new collateral requirements for committed liquidity facility
While revisions to Basel III have reduced South African banks' immediate LCR shortfall, they are still 140 billion rand short, according to the central bank
Central banks face $450bn in paper losses from gold holdings
The decline in world gold prices during the first half of the year has resulted in the value of central bank gold reserves falling by $447 billion; latest entrants into bullion market hardest hit
Fisher: Fed has its finger on taper trigger
Dallas Fed’s Fisher says the FOMC is nearing ‘execution mode’ on the back of improving employment figures; Philadelphia Fed’s Plosser wants ‘brighter line’ between monetary and fiscal policy
Bank of England's prudential regulator consults banks on capital requirements
The UK's Prudential Regulatory Authority wants to hear from financial institutions about the best way to implement Europe's new CRD IV legislation
India in search for new RBI governor as Subbarao set to leave in September
Duvvuri Subbarao will leave the RBI this year after five years at the top; no clear favourite as yet to replace him, as three external candidates attract speculation
NY Fed researchers explore long-term rate rise
Ten-year Treasury yields rose ‘sharply’ between April and July; researchers attribute this to an increase in the compensation investors were demanding to hold them
Currency appreciation not just bad news for exporters
The use of cheaper imported intermediates compensates for 0.2 percentage points of a 1% currency appreciation followed by proportionate drop in export sales, Czech National Bank study shows
BoJ on target as IMF urges Abe to loose his other arrows
IMF says fiscal and structural reforms are necessary to create ‘durable’ increase in inflation; encourages Bank of Japan to begin internal discussions over its exit plan
Adopting electronic retail payments boosts real economy, says ECB paper
Working paper says efficient electronic retail payment infrastructure boosts GDP, trade and consumption; integrating and harmonising different markets amplifies these effects
Bundesbank paper confirms O-ring theory effect for FDI
Paper written by two economists at the University of Munich finds that the position of a country's industry on the value chain is just as important in determining FDI as is the country's productivity
Dutch study uses neuroscience to dissect consumers’ payment choices
The Netherlands Bank uses an MRI scanner to examine what is going on in consumers’ minds as they choose whether to pay by cash or card
Zambian central bank sees currency stability but inflationary pressures through year-end
The Zambian kwacha has taken a hit against the biggest global currencies but appreciated against the South African rand, meaning REER held steady
Leiderman turns down Bank of Israel top job
Prime minister Benjamin Netanyahu in sticky situation as top two choices turn down central bank governorship within five days of each other; pool of potential candidates shrinking fast
Central Bank of Ireland director says it will take ‘some time' to get out of crisis
Fiona Muldoon adds the task now is putting together a business model for Ireland that ‘expands on parts of the economy not built on buying and selling houses to each other at ever inflated prices'
Bullard says Fed should ape ECB press conference schedule
James Bullard of the St Louis Fed wants to see the Fed chair give a press conference after every meeting of the FOMC - not after alternate meetings, as is the case currently
RBI governor champions ‘logically robust' financial regulation
Duvvuri Subbarao says financial markets stand out because they are not self-correcting, and because financial firms are highly leveraged and uniquely interconnected
IMF spillover report highlights tough balancing act for leading economies
Report examining international effects of policies in China, the eurozone, Japan, the UK and US, says easy monetary conditions essential but warns of future side-effects
IMF backs Czech forex intervention
Article IV says a ‘persistent and large undershooting’ of the Czech National Bank’s inflation target would warrant a weaker koruna; governor Miroslav Singer says board is coming round to the idea