Emerging markets
BIS paper finds emerging market corporations exploiting carry trade
Study of emerging market foreign currency-denominated bond issuance by Bruno and Shin finds corporations appear to be issuing bonds as part of a carry trade, rather than financing investment
Capital controls ineffective at handling policy trilemma, ECB paper finds
Emerging market capital controls have a limited impact on monetary policy trilemma variables and come with spillover effects, the authors warn
BIS researchers dissect emerging market fire sales
Working paper picks apart the channels through which asset management impacts on emerging bond markets, finding evidence of procyclical behaviour
Tenge plunges as Kazakhstan moves to free float
Pressure on currency forces central bank to abandon peg, although the government casts it as the next step in the shift towards inflation targeting
IMF paper: capital inflows work differently on credit for households and firms
The composition of capital inflows affects whether and how they cause credit growth, IMF working paper says
Bank of Canada paper flags risk of spillovers from emerging to developed economies
Researchers show how a search for safe assets could transmit instability to developed economies as capital flows out of emerging markets
BIS economists warn of emerging market policy dilemma
Emerging markets are increasingly exposed to monetary policy in developed economies, transmitted via lower long-run rates, and it is not clear what central banks can do about it
BoJ paper finds emerging markets struggled to protect themselves from QE
Foreign exchange interventions and capital flow policies did little to shield emerging markets from the spillovers caused by quantitative easing in the US
IMF laments lack of progress on global imbalances
Fund calls on both surplus and deficit economies to redress imbalances, arguing this would support global demand management and growth
Bank of Korea research tots up damage from capital flows
Researchers attempt to measure the impact of foreign financial flows on the real economy, finding the type of flow matters for growth, but all types increase volatility
Some emerging markets still dangerously exposed to dollar debt, IMF warns
Spillovers report underscores the importance of net/gross distinction, as improvement in net debt position provides fig leaf to some countries that may be overexposed to US dollar appreciation
IMF paper offers advice on Asian financial integration
Authors suggest improvements to the sharing of information, trade integration, capital market development and a common regulatory framework to improve financial integration in Asia
IMF researchers find FX interventions can help tackle pressures from global capital flows
Working paper penned by team including Olivier Blanchard takes new approach to endogeneity problems, finding foreign exchange interventions can stem appreciation pressures from global flows of capital
BoE turns attention to contagion from emerging markets
UK banks’ exposure to emerging markets is a cause for concern and will be integrated into 2015 stress test scenario, BoE says in financial stability report
Bank of England launches redesigned financial stability report
Central bank aims to convey a clearer picture of the risks facing the UK economy with a shorter, clearer and less repetitious financial stability report
Carney says regulations may have gone too far
It is time to ‘take stock’ of financial regulations to ensure they are not imposing unintended consequences, Bank of England governor says
IMF paper finds foreign investor base crucial for EM sensitivity to shocks
Working paper finds emerging markets that rely more on international funds and global banks are more sensitive to ‘global push factors’ such as US monetary policy
BIS researchers find evidence of macro-pru and monetary policy cancelling out
Study of macro-prudential policy in South-east Asia shows policies work best when used in same direction; paints complicated picture including ‘some evidence’ of spillovers
Jeffrey Frankel argues for NGDP targeting by EMs
Monetary economist says targeting nominal GDP could allow emerging and developing countries to more credibly establish a nominal anchor
Central banks face weight of expectations in sub-Saharan Africa
The art of central banking has changed dramatically in frontier markets. Monetary policy, financial regulation, capital flows and exchange rate are now centre stage, writes Louis Kasekende
Governments should work to promote ‘e-commerce’, UN report says
Research presented at the National Bank of the Republic of Macedonia outlines policies governments should pursue to harness the benefits of e-commerce
Colombian paper extends Bernanke research on asset price bubbles
Paper delivered at the BIS extends Bernanke and Gertler’s result that central banks should not lean against asset bubbles, finding the conclusion still holds in a small open economy
NBER paper challenges Rey’s monetary policy dilemma
Authors find evidence to support the continued existence of a traditional monetary policy trilemma, casting doubt on Hélène Rey’s theory that the trilemma has broken down
BIS economists say investor behaviour key to understanding EM challenges
Hyun Song Shin and Philip Turner consider implications of shift in financial intermediation for emerging markets; part of wider Banque de France review on the subject