Central Banking
ECB research finds exchange rate decoupled from fundamentals
Paper suggests euro exchange rate during the European sovereign debt crisis ‘danced to its own tune’, but volatility was impacted by politicians’ statements
Paper finds pro-cyclical labour market in the great recession
Researchers claim US labour force participation since 2007 violates conventional wisdom on acyclical behaviour
World Bank says east Asia and Pacific at risk of ‘overheating’
Asia-Pacific policymakers urged to consider withdrawing stimulus – fiscal and monetary – as region’s larger economies reach their productive capacity and face inflationary pressures
BoE’s Bailey questions why top managers not punished for failure
Head of prudential regulator says it is ‘more than odd’ that people lower down the ranks in financial institutions were punished for failures but not top managers; warns EU remuneration plans undermine UK efforts
Schäuble condemned for ‘irresponsible' statements aimed at delaying banking union
Legislators and commentators round on German finance minister's 'political' comments suggesting banking union can't go ahead without treaty change
Eurozone problems still ‘looming large’, says Draghi
ECB president Mario Draghi says ECB’s policy not affecting all eurozone countries; central bank cannot tackle root causes of crisis and urges improved competitiveness
People: Central Bank of Trinidad and Tobago gets new deputy; Fiji management shake-up
Central Bank of Trinidad and Tobago names Alvin Hilaire as new deputy; Fijian IMF secondment sets off managerial merry-go-round; and more
Colombian paper flags danger from abnormal credit growth
Credit expansion does not always imply excessive risk-taking, but abnormal credit growth causes greater risk-taking and contributed to Colombia’s financial crisis in the late 1990s, paper finds
Bundesbank research says sovereign default can be the best option
Discussion paper finds it may be optimal to choose a costly default over legal repayment, but only when a country is facing disaster
EC to fight new US prudential rules for foreign banks, says EBF
EC "very concerned" about capital and liquidity proposals, says chief executive of the European Banking Federation
Central bank remits have little impact on policy
Bank of England MPC member says the weight central banks ascribe to output and employment makes little difference to the monetary policy they follow
French paper warns of banks precipitating crises through hoarding
Research develops new ‘domino effect’ model, examining how banks may bring about crises by attempting to protect themselves
New DSGE model finds anticipated 'low for long' policy can cause a boom
Finnish paper, inspired by US policy of the early 2000s, finds combination of too-low-for-too-long interest rate policy and optimism leads to an increase in overall leverage
BIS committee hails Basel III progress
In report to G-20, the Basel committee says member countries are making ‘considerable progress’ implementing Basel III, despite long delays; laments ‘excessive’ variation in RWAs
FSB review finds bank resolution regimes 'lack important powers'
Results of last year's peer review show many countries still need to pass legislation to empower supervisory agencies to resolve failed financial institutions effectively
Draghi enters fray to defend Cyprus central bank independence
ECB president warns Cyprus government against violating the central bank’s independence by dismissing its governor; says any gold sales should benefit the central bank ‘first and foremost’
Kuroda outlines thinking behind monetary shock tactics
New BoJ governor says ‘quantitative and qualitative measures' will remain in place until inflation stabilises at the 2% level, and explains why he rejected a gradual approach to easing
CNB board member issues warning on common bank resolution
Lubomir Lízal says common bank resolution most worrying element of European banking union; renminbi too politicised to use as reserve currency
Central banks 'getting away with murder', says currency investor
Central banks are pursuing the wrong policies and will find it difficult to know when to tighten monetary policy, says Axel Merk
Plosser: Fed should cut asset purchases now
Philadelphia Fed president says there has been ‘substantial improvement’ in US economy and labour market; sees scope to taper asset purchases now and end programme altogether in 2013
Interest rate forecasts ‘constrain’ central banks
Norwegian paper finds that Norges Bank and Reserve Bank of New Zealand are ‘reluctant to deviate’ from interest rate paths they have previously published
IMF researcher proposes new method for top-down stress testing
New, simple methodology for structural market-based top-down macro stress tests aims to overcome onerous data requirements
Italian governor calls for greater understanding of Islamic finance
Ignazio Visco says ethical finance focuses on 'the link between financial transactions and underlying assets'
ECB’s Cœuré outlines efforts to cushion impact of regulation on SME lending
Executive board member says the European Central Bank can only tackle funding constraints – other stakeholders must address credit risk and lack of capital