Central Banking
Latvia’s Rimsevics predicts solid year for the economy
Governor of the Bank of Latvia expects inflation to remain moderate and growth, while slower than 2012, to show one of the fastest rates in the European Union
Luxembourg paper says banks’ profitability will not suffer at hands of Basel III
Study says new liquidity coverage and capital-to-asset ratios will have little impact on banks’ return on assets
NZ deputy wary of using risk weights to shackle house prices
Grant Spencer says other macro-prudential tools may be more appropriate to address the build-up of asset bubbles
LatAm countries play down talk of burgeoning currency war
Peruvian and Colombian central banks say dollar purchases are being made to build reserves and reduce volatility; Latin America faces wide range of currency challenges
Swedish deputy insists on stronger macro-prudential framework
Kerstin af Jochnick wants clearer macro-prudential mandate and decision-making structure; says recent committee proposals are not the answer
CIC chair tells Davos central banks must ‘mop up' excess liquidity
Former member of PBoC's MPC says central banks have a responsibility to assuage inflation fears as economies return to growth; Bank of Italy governor says economic recovery is not central bank's job
BoE and PBoC potential swap line met with optimism
Bank of England executive director announces willingness to create swap line with People’s Bank of China; currency strategists see little immediate impact but potential for growth
Banks rush to repay LTROs at first opportunity
Repayments of the European Central Bank’s long-term refinancing operations exceed many analysts’ expectations, as 278 banks choose to pay back nearly 30% of the total
EU Parliament poised to reject two Esma technical standards on OTC derivatives
Parliament is unhappy with the treatment of corporate end-users, and could require Esma to redraft standards
Polish monetary policy council divided on size of rate cut
National Bank of Poland lowers interest rate for third successive meeting; some council members push for even deeper cuts
Banking crises scar labour productivity, finds BoE paper
Research says short-term growth of productivity and long-run levels are damaged by financial and banking crises
Dutch paper attempts to fill gaps in European unsecured lending data
Working paper develops algorithm to extract information on unsecured money-market loans from Target2 data, then uses the new data to identify trends in lending
ECB working paper highlights success of LTROs
Researcher finds three-year long-term refinancing operations significantly boosted European growth prospects and eased lending conditions
Payments update proposed for UK money markets
Bank of England reveals details of new clearing and settlement system for gilt repos; executive director Chris Salmon encourages market participation
Ingves deflects criticism of ‘complex’ Basel III framework
Basel committee chairman says it is naïve to think complex banks can be regulated by simple rules, following criticism of Basel III’s ‘overly complicated’ system of risk weights
Bank of Italy steps in to investigate ‘hidden' derivatives deals
Central bank to investigate Monte dei Paschi di Siena trades in collaboration with judicial authorities, as the Italian bank seeks €500 million in 'Monti bonds' to cover potential losses
Mixed reactions from banks as ECB prepares to wind down LTROs
Repayment window for LTROs set to open on January 30; some commentators raise concerns over possible monetary tightening, while others view early repayments as sign of financial health
Carney insists Bank of Canada will tighten policy despite holding rates again
Mark Carney says the withdrawal of monetary stimulus is postponed, but not cancelled, as Bank of Canada’s governing council holds rates again
IMF research finds inflation targeting can dampen risk premiums
Working paper suggests inflation targeting reduces a country’s risk premium, although this effect is stronger for emerging markets and where inflation targeting is successful in stabilising prices
Bank of Finland researchers examine role of liquidity creation in bank failures
Experience of Russia from 2000–07 suggests early identification of excessive liquidity creators can 'mitigate systemic distress'
Macro-prudential policy can prevent euro area imbalances, says Polish paper
National Bank of Poland study finds macro-prudential instruments can prevent periphery and core imbalances emerging in the euro area, but only if applied regionally
IMF predicts chequered growth performances in 2013
Updated World Economic Outlook forecasts wide disparities between countries’ growth performances in the next year; overall estimates revised down since October
Central Bank of Colombia faces presidential call to cut rates
Colombian central bank under pressure from lawmakers and bankers to lower interest rates as growth falters and inflation dips below target
Draghi optimistic as ‘darkest clouds’ in euro area subside
ECB president Mario Draghi praises the euro area’s achievements in 2012, and urges countries to be unrelenting in their pursuit of reform