Asset prices
Widening exchange rate band is not a top priority – PBoC’s Zhou
Zhou makes first public confirmation he is set to retire soon; warns the country’s excessive optimism could lead to a “Minsky moment”
Don’t underestimate the Fed’s balance sheet unwind – Fischer
Stanley Fischer offers advice to colleagues in his final scheduled speech before leaving in October: “never say never”
RBI closes in on ‘endgame’ in bank clean-up
Governor Urjit Patel says the central bank’s new powers have allowed it to overcome “severe” moral hazard problems; state-owned banks will need recapitalisation, he says
RBA’s Kent warns mortgages are still risky, despite offsets
RBA assistant governor says use of offset accounts does not remove the need for tighter lending standards; new securitisation database sheds light on housing market
How to divest public sector assets
Exit programmes for public sector assets could create uncertainty through supply/demand imbalance, but a tap facility – a private sector triggered exit programme – could be the solution, writes Hon Cheung, chief investment strategist, official…
Draghi, quo vadis?
Jesper Berg warns the eurozone's improved outlook creates a host of problems for the ECB, as it must balance competing demands
Brainard cautious over further hikes in interest rates
Fed governor says she will be watching inflation “carefully” over the coming months, stating the unwinding of the balance sheet will begin ”soon”
ECB’s Cœuré says asset purchases are not responsible for exchange rate movements
Executive board member says Europe’s asset purchase programme has boosted economic growth and inflation prospects; policy not “fundamentally different” from conventional policy
Fischer cautions against complacency
Fed vice-chairman says it would be “foolish” for policymakers to think they have eliminated all risk; there are still areas where supervisors have “limited insight”, says Fischer
Model looks at outbreak of ‘fire sales’
Higher capital ratios may aggravate financial contagion, the authors say
Former central bank governors debate unconventional monetary policy
Trichet, Shirakawa and Weber agree unconventional tools may have outstayed their welcome; costs of tools used during the crisis will not be known for some time, Weber says
London financial sector likely to ‘lose prominence’ following Brexit, says Sarb bulletin
South Africa to watch developments in London closely following Brexit vote, as domestic banks decrease exposures to the UK
Encouraging creation of ‘quasi-safe assets’ may be destabilising, paper argues
Investors have distinct “safety demand”, researchers argue
Xi says China is open for business as US turns away
China to become a bigger player in global markets as US seems to be turning inwards, says President Xi; firms looking to invest overseas
BoE studies effects of capital requirements on balance sheets
After the financial crisis, banks placed more emphasis on asset deleveraging and adjusted their capital management practices
Dutch paper explores information content of asset prices for inflation
Working paper finds high asset prices can be an indicator of either high or low inflation, though more commonly the former; considers information content of range of financial variables
Singapore’s GIC warns of lower returns in coming years
High valuation of asset prices and modest growth outlook points to lower returns in coming decade or two, GIC says; 20-year annualised real rate of return fell last fiscal year
Towards a more stable monetary world order
A global network of independent central banks could act as a manager of expectations for asset and foreign exchange prices to reduce the burden of future crises, argues David Harrison
Central bank gold purchases near record levels
World Gold Council argues negative interest rates make gold a favourable asset, but Thomson Reuters team sees other factors at play
IMF’s Viñals announces ‘long and testing to-do list’ for policy-makers
Viñals says the plan for ‘great normalisation’ is more urgent than ever; calls for policy action beyond monetary and financial measures
Financial variables improve output gap estimates, BoE paper finds
Adding financial variables to estimates of the output gap can allow policy-makers to spot trouble on the horizon more easily, authors say
Research considers why macroeconomic announcements impact asset prices
A working paper published by the ECB weighs the ‘intrinsic value’ of macroeconomic news announcements in the US, finding timing is crucial to maintaining it
Bank of England paper explores time-varying capital requirements
Authors use firm-bank level database from UK to examine impact of higher capital requirements on asset growth of borrowing firms; also consider interaction with monetary policy
Bank of Canada identifies ‘prolonged weakness’ in commodity prices as a key risk
Latest financial system review suggests the resulting stress would be ‘manageable’, although an additional ‘large and broad-based drop’ would pose a bigger problem