Market function
YCC, carry trades and the changing role of the yen
Marcello Minenna argues that as the BoJ adjusts its policy regime, changes in carry positioning are increasing the instability of the correlation between exchange rates and yield differentials
How will Europe’s central banks react to the Middle East crisis?
ECB unlikely to veer from rate path as it had expected to undershoot during 2026
IMF has no mandate for SDR stablecoin, says Tobias Adrian
Fund’s capital markets head says backstops are also crucial if instruments are to live up to their name
Ex-governor says Fed should use Treasury derivatives in crisis
Doing so could split response from monetary policy and hedge interest rate risks, argues Jeremy Stein
A not-so-stable Genius Act?
New stablecoin rules raise monetary sovereignty and financial stability concerns
BoE’s Benjamin on market resilience, non-bank liquidity and the modern financial system
The UK central bank’s executive director for financial stability strategy and risk speaks about leverage in the gilt repo market, minimum haircuts and central clearing, and securing liquidity to where it’s needed
Tobias Adrian on the integrated policy framework amid tariff shocks
The IMF’s financial counsellor speaks about policy reaction functions to supply and demand shocks, scenario-based analyses, Treasury market dynamics and emerging market resilience
Finland’s Välimäki on the ECB’s monetary policy framework review
Bank of Finland board member Tuomas Välimäki discusses the benefits of a ‘hybrid’ balance sheet model to provide dependable structural liquidity without distorting markets
Ex-OCC chief Michael Hsu on the impact of an America-first agenda
The former acting comptroller of the currency speaks with Christopher Jeffery about the future of the US Treasury market, Fed independence, financial de-regulation, the Genius Act and international co-operation
Paraguay’s Carvallo Spalding on resilience and cutting its inflation target
The Central Bank of Paraguay (BCP) governor speaks about lowering the inflation target to 3.5%, opening up to foreign investors and promoting inclusion through digital payments
A fractured monetary system
US policy is encouraging a transition away from a dollar-led, rules-based order
IMF officials call for central clearing of sovereign bonds
“More work needed” to enhance structural resilience in core markets, researchers say
Malaysia’s Rasheed expects a “bumpy road” for EM currencies
Governor Abdul Rasheed Ghaffour says BNM will intervene if needed ahead of future Fed cut; rules out capital controls but has encouraged institutions to repatriate earnings
BNM’s Rasheed on inflation, growth and currency performance in emerging markets
Bank Negara Malaysia’s governor speaks about balancing inflation and growth, supporting the ringgit, multilateral currency settlement and greening Islamic finance
Most asset purchase programmes are winding down
Around a quarter of respondents have open APPs but most are shrinking
Defending the basis
Benefits of additional Treasury liquidity may outweigh potential intervention costs during a hypothetical panic, writes Joseph Wang
Lagarde calls for stronger EU securities and markets authority
ECB president stresses completing capital markets union is essential to deal with deglobalization, ageing and climate change
ECB: from a supply to a demand-driven floor?
Eurozone’s central bank expected formally to abandon corridor in forthcoming operational framework review
BoE launches first ‘system-wide’ stress test
Analysis will assess how banks and non-banks interact to amplify shocks
BoJ’s easing stance fuels yen undervaluation dilemma
Japanese policy-makers need to consider feedback loop that an undervalued yen has on cost-push inflation; reflect on YCC exit options in ‘broad perspective review’, writes Sayuri Shirai
Rule-setters need to heed their own advice
The US risks a reputation for failing to meet standards to which it holds others