Balance sheet
BoE capital injection lays ground for stronger crisis response
Higher risk-bearing capacity allows additional emergency measures, Mark Carney says; move could bring forward BoE’s exit from QE
Experts warn Mexico’s peso defence could be costly
Risks on the horizon prompt concerns around the Bank of Mexico’s approach to forex volatility
SNB loses $6.9 billion in Q1
Higher interest rates reduced the value of sovereign bonds
The Bank of Italy’s approach to risk-based budgeting
The financial crisis blurred the lines between Anglo-Saxon and continental European central bank models, presenting challenges when treating both the sources of risk and risk-bearing capacity using financial and accounting budgeting techniques
The IFF China Report 2018: Post-financial crisis – A decade on
The Global Financial Crisis sparked Group of 20 countries to introduce tough new regulations on financial institutions and instruments. Yet the architecture of the global monetary, economic and financial system has many flaws. What lessons can China…
Global leverage may be higher than supervisors realise – IMF paper
Standard measures of leverage are too focused on balance sheets, researchers say
Iran makes fresh attempt to free frozen assets
Central bank files complaint against Clearstream demanding assets worth $4.9 billion plus interest
Fed economists tackle question of optimal balance sheet size
Cutting balance sheet would significantly reduce interest rate risk, economists find, as Fed acknowledges lower profits due to interest payments
Fed paper sets out model of financial panics
Mark Gertler, Nobuhiro Kiyotaki and Andrea Prestipino examine banking panics in a DSGE model
IMF concerned about Tanzanian NPL levels
Addressing financial sector vulnerabilities should be a “priority”, as high NPL levels start to restrict lending to the private sector
Quick action needed to tackle housing busts – RBNZ paper
Paper studies housing busts around the world and how best to respond to them
BoE economist explores ‘active’ QE model
Quantitative easing could be made a more conventional part of central bank toolkits, used to help support spending and inflation, says Harrison
Cocos lower banks’ funding costs – BIS paper
Mechanical triggers and equity conversion strengthen cocos’ impact, paper finds
Fed’s Harker ‘pencils in’ rate hike for December
Philadelphia Fed governor expects rates to rise 25bps before 2018, adding balance sheet normalisation is likely to “take some time”
BIS paper studies how weak banks beget zombie firms
Weak banks have a tendency to misallocate capital, authors find, though the effect is only important in the long run, in contrast to earlier studies
Central banks and securities lending: A lever for monetary policy and liquidity management
Securities lending is often considered an alternative mechanism for generating revenue by asset owners, fund managers and others who invest with profit in mind. Central banks, however, do not share this viewpoint. Rather, their securities lending…
The optimal size for central bank balance sheets
As the Fed seeks to reduce the assets on its balance sheets, Charles Goodhart examines the role between monetary and fiscal policy, central bank and debt office, and the optimal size of a central bank’s balance sheet
Bahamian central bank proposes law change to cap government debt holdings
New legal framework for Bahamas central bank would enforce “comprehensive” limits on government debt; holdings of long-term government debt stand at 12.52%
ECB taper unlikely to upset major European equity investors
Norway’s sovereign wealth fund is boosted by its €200 billion investment in European stocks
RBI eyes unwelcome turnaround in India’s economy
Central bank on hold as growth slows and inflation ticks up sharply; Urjit Patel notes heightened volatility and geopolitical tensions
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”
John Williams on the neutral rate of interest and mandate change
The president of the Federal Reserve Bank of San Francisco speaks about the plunge in the natural rate of interest, and why it means central banks should work together to review their price stability targets
Leading asset manager warns policy normalisation ‘may never occur’
Northern Trust believes monetary policy is unlikely to revert to pre-crisis levels; observers say central banks are broadly taking the right approach
The Treasury could make QE exit faster and smoother
Swapping longer-term bonds for Treasury bills or floating-rate bonds would expedite the process of reducing bloated central bank balance sheets