Bonds
Party politics may influence German banks’ bond holdings, ECB paper finds
Researchers examine effects of local elections on decisions by local savings banks
Fed’s Brainard warns of ‘financial imbalances’
Fed board member points to risks in high asset prices and business debt
Quarles: yield curve flattening not “likely” a signal of recession
Flattening of yield curve is due to “expected lags” in the adjustment of longer-term rates once shorter-term rates start to rise, says Fed vice-chair
Rising rates seen as main risk by reserve managers
High asset prices and the halting and withdrawal of bond-buying programmes pose challenges
Synchronisation of global house prices poses new risks – IMF
Macro-prudential housing policies may be affected by global movements, researchers say
Riksbank should reduce balance sheet to avoid risks – Flodén
“Best way” of running down bond holdings is to hold bonds until maturity
Central bank data shows Venezuela is in ‘stealth default’
Debt repayments have rapidly decreased since October 2017, data shows; reports suggest Goldman Sachs has been paid
Norwegian sovereign wealth fund says 2017 saw third-highest annual returns
NBIM says returns from holdings in oil and gas companies lag those of other sectors
Fed anticipates higher growth and tighter policy
Policymakers consider the latest economic data warrants the continuation of gradual policy normalisation
Reserve manager of the year: Bank of Korea
The South Korean central bank has revamped its reserve operations, and adopted a proactive approach to managing risks and returns that is matched by few of its peers
Post-crisis fiscal cuts boosted solvency without harming liquidity – DNB paper
Dutch paper uses yield spreads to analyse impact of consolidation announcements on investor perception of government solvency
Saudi Arabia’s Alkholifey on economic restructuring, reserves and cyber security
The Saudi Arabian Monetary Authority’s governor talks to Christopher Jeffery about the restructuring of the Saudi economy, the impact of low oil prices on reserves and anti-money laundering efforts
Central banks mull securities lending as response to low yields
Institutions are proving more willing to experiment as conservatism threatens to erode their reserves
Implementing a holistic and dynamic risk budget
The National Bank of Denmark has implemented a dynamic risk budget that takes the bank’s unavoidable policy risks as the point of departure. The new approach has led to a reassessment of investment exposures and how they are rebalanced over time and…
China’s shadow banking market dominated by banks
BIS researchers map the Chinese shadow banking system and its evolution over time, finding it contrasts with the market-based shadow banking of the US
A dangerous unknown: interest rate risk in the financial system
Urgent action is needed to tackle the little-understood build-up of interest rate risk in the global financial system; macro-pru tools still inadequate to tackle the issue
Court orders former Sri Lankan governor to report to police
Former governor’s son-in-law arrested over allegations of central bank insider dealing
Bank of Japan increases bond purchases amid global sell-off
Both the prime minister and the governor see no rush to withdraw stimulus
Lower growth follows credit booms with high-yield lending – paper
Lending standards in bond markets track banks’ credit standards
BoE’s Brazier flags concerns about ‘stretched’ credit markets
BoE is simulating ‘liquidity mismatch’ in bond markets to ensure financial stability, says executive director; central bank has a ‘duty’ to adapt regulation
Sovereign bond-backed securities could improve eurozone stability – ESRB
Regulations would need to change and treatment of sovereign bonds would be vital, argues Central Bank of Ireland Governor
HKMA exchange fund clocks 10-year high returns
Returns driven by strong global economy and financial markets; 7.1% figure highest since 2007
Sri Lankan inquiry says former governor may have acted criminally
Finance minister may have been “corrupt” and deputy governors were "negligent”, report says
Asset manager of the year: BlackRock
BlackRock delivered some innovative new products and a highly regarded training scheme to build on its already strong foundation in reserve management services