Central Banking
Sri Lanka cuts rates 50bp in defiance of IMF advice
Central bank cuts benchmark interest rate by 50bp to 7% as growth stutters and inflation falls; IMF warned yesterday against ‘further easing of monetary policy in the near term'
Reserve Bank of Australia publishes monetary policy statement
RBA Monetary Policy Statement says cash rate could change further 'to foster sustainable growth and low inflation'
Iceland’s Guðmundsson backs MAS-style stability model
Icelandic governor says managed float and strong supervision are important lessons to be taken from Singapore; says capital controls helped avoid a default in Iceland, but should not be used lightly
Plosser warns US regulations could cause unnecessary bail-outs
Philadelphia Fed president says existing efforts to end too-big-to-fail may ‘come up short' and advocates a more rules-based approach; criticises Basel III risk weights
Banks push alternative to Basel Committee securitisation model
Basel proposals would kill European market, banks warn – and some regulators sympathise
Central Bank of Nigeria hits back at ‘unfounded and mischievous’ reports
Central bank denies reports that it destroyed documents demanded in a hearing of the Nigerian parliament’s Public Accounts Committee
Bernanke outlines Fed's ‘intensified' monitoring of financial system
Focus is on Sifis, shadow banking, asset markets, and the non-financial sector, according to the chairman of the Federal Reserve
Ireland’s Elderfield says ‘imperfect’ Solvency II should still go ahead
Deputy governor highlights many imperfections in the Solvency II framework but says it is better than the fragmentation and rising costs that are the alternative
South African paper models international spillovers
Study finds South Africa is a ‘net receiver’ of spillovers from other economies; suggests this is likely to persist as business cycle synchronisation has increased
Bank of Spain financial stability report finds ratio of bad loans still growing
Contraction in new lending to households and businesses, combined with a poor macroeconomic environment, means Spanish bank loan books are on average not improving
NY Fed paper assesses risk of fire sales in tri-party repo markets
Staff report finds limited tools are available to reduce the damage from pre-default fire sales but says there are no options currently available once a default has occurred
European Parliament poised to approve next step in banking union
European political groupings have reached agreement on a text for the recovery and resolution piece of Europe's planned banking union
People: New director-general at Bank of Italy; Bank of Israel adviser ends 30-year tenure
Salvatore Rossi becomes Bank of Italy's director-general; Barry Topf leaves Bank of Israel after 30 years; and more
IMF paper scrutinises ‘procyclicality’ in reserve management
Over half of central bank reserve managers surveyed by IMF say they would alter practices to reduce procyclicality; paper questions reliance on credit rating agencies
Australian regulators unveil criteria for mandatory clearing
Three regulators, including the RBA, reveal how they will decide whether and when to implement mandatory clearing requirements for OTC derivatives
European rates: UK and Norway on hold as Denmark and Poland cut
Bank of England marks time ahead of Mark Carney’s arrival and Norges Bank keeps policy steady, while Denmark and Poland take action
Korean rate cut follows global trend but takes analysts by surprise
Base rate cut of 25 basis points by Bank of Korea aims to boost inflation and employment, and halt the Korean currency's rise against the yen
BoJ paper suggests models may misrepresent impact of easing at ZLB
Working paper questions why many studies in monetary economics use model that does not account for zero lower bound; finds model tends to underestimate term premia
RBI paper scrutinises monetary policy transmission
Research analyses strength of monetary policy transmission in range of Indian financial markets; says it is conducted most effectively to money markets but has ‘limited’ influence on stock markets
Asmussen and Rehn sketch plans for European body to replace ‘troika'
ECB board member defends scale of emergency liquidity extended to ‘insolvent' Cypriot banks; confirms the bank has an open mind on ABS purchases to ease SME credit crunch
Mersch lists monetary policy dos and don'ts
ECB board member tells Luxembourg audience monetary policy should take responsibility for ‘averting Armageddon', but there are limits to what it can do
Korea paper warns developing economies over financial openness
Research suggests open capital markets in developing economies create output volatility; suggests Asian countries are the least stable in a crisis
RBI sees scope for Giro payments system
Committee finds India’s existing payments system fails to meet consumers’ needs when paying bills; proposes a supplementary system to move bill paying onto a single interoperable platform
Taiwan central bank chief sets out priorities for new ADB president
Fai-Nan Perng says new Asian Development Bank head must build on the successes and correct the failings of the institution