Asset prices
Federal Reserve posts largest operating loss ever
As of March 21, the Fed owed $157.8 billion to an accounting device, a “deferred asset”
Bank of England launches system-wide stress-test scenario
Exercise is first-of-its-kind look at macro-prudential impact of shocks to banks and non-banks
Claudio Borio on financial cycles, operating frameworks and non-bank reform
The BIS veteran highlights a ‘unique constellation’ of challenges as central banks travel the ‘last mile’ in bringing down inflation – and says there are many more miles to go on non-bank reform
Ring-fencing protects retail banks, but lowers total equity value
BoE research finds concentrating risks in one group of banks depresses asset prices
Carney derides UK ex-PM’s economic policy
Former BoE governor says cutting taxation does not automatically lead to growth
Stefan Ingves on central bank failings on inflation and financial stability
The Riksbank veteran speaks about liquidity, interest rate and non-bank regulatory reforms, the importance of saying ‘no’, and the need for explicit legal definitions for digital money
Liquidity buffers had mixed impact during Covid-19, ECB paper finds
Higher buffers for funds slowed initial fire sales but had less impact during “peak phase”
Central banks’ pandemic interventions averaged 6% of GDP
IMF paper finds relief measures were three times bigger than in global financial crisis
Common deposit insurance essential for financial stability, says ECB
Central bank says tighter financial conditions are putting pressure on households and businesses
Climate change and the role for central banks
Gavin Bingham, Andrew Large and Paul Fisher explain how climate change affects central banks and the competing tensions it raises in relation to policy responses
Book notes: A guide to good money, by Brendan Brown and Robert Pringle
The authors make some good points even if one does not agree with this full-bodied attack on Keynesian economics and inflation targeting
Bitcoin price does not respond to market signals – paper
Researchers find cryptocurrency value “orthogonal” to most economic indicators
Loose monetary policy has ‘big’ impact on crisis risk – NBER paper
Authors find causal link between easy policy stance and future financial instability
BoE says rush to sell could undermine insurance stability
Supervisor questions whether some firms’ stress-test assumptions are “realistic”
The rise of non-SDR currency reserves
New Cofer data release may show an overall fall in FX reserves, writes Gary Smith
BoE begins unwinding gilt market intervention
Use of “reverse enquiry window” designed to limit market impact from £19 billion sales
Inflation: what went wrong, and why?
Charles Goodhart and Manoj Pradhan detail three theories on the causes of high inflation, as well as their implications for policy responses
How central bank mistakes after 2019 led to inflation
Central banks must acknowledge their own mistakes and outline concrete steps to restore the public’s confidence in their ability to ensure price stability, write Graeme Wheeler and Bryce Wilkinson*
The case for restoring the role of monetary aggregates
Tim Congdon argues that a surge in money supply in response to Covid-19 sparked heightened inflation and central banks need to refocus their attention on monetary aggregates
Paper explains why ‘Fed put’ is not as reliable as investors might like
Disagreement between Fed and market can create perception central bank is “behind the curve”
Tackling private-sector debt in the wake of the pandemic
Navigating Covid-19 debt is more of a challenge amid gathered storms of inflation and war, write Roong Mallikamas and Benjamin Weigert