Asset prices
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
Central bankers have lost sight of inflation
Inflation resurgence comes after central bankers were distracted from their primary task by climate and crypto, combined with an overreliance on new Keynesian approaches
The international effort to manage NBFI risks: where do we stand?
The Covid-19 shock demonstrated more needs to be done to address stability risks posed by the NBFI sector. Maurizio Trapanese details progress made during the Italian G20 presidency as well as outstanding macro-prudential issues
Central bank of the year: Bank of Korea
South Korea’s central bank was the first developed-world central bank to tighten policy to address inflationary risks
Regulators race to curb crypto asset money laundering
Crypto assets are increasingly used as vehicles for money laundering, but regulating them is not necessarily straightforward
Swedish central bank announces end to net asset purchases
Sveriges Riksbank forecasts it will not raise rates until 2024, saying inflation rise is temporary
How to #GreentheCBs
Invesco‘s Claudia Castro and Wim Vandenhoeck explore how central banks can strike a balance between innovation and disruption with their sustainability agendas.
Fed warns of China debt risks
Financial Stability Report mainly optimistic about systemic health, including housing market
Asset sell-off biggest threat to Chile’s financial stability – Marcel
Governor reiterates warning against further pension withdrawals