Emerging markets
IMF calls for demand boost to avoid 'new reality' of lower potential
IMF World Economic Outlook contains echoes of Larry Summers' view that the world's economies need shock therapy to avoid secular stagnation
FSB adds new emerging market members
Five new institutions join Financial Stability Board as part of efforts to improve emerging market representation; Glenn Stevens takes over as standing committee chair from Agustín Carstens
BIS paper weighs effectiveness of FX intervention strategies
Intervention to reduce volatility or to lean against exchange rate movements each come with distinct costs and benefits, working paper finds
CNB paper questions strength of ‘border effect’
Studies using outdated methodologies overestimate the impact of national borders on trade, authors say; effect is stronger in emerging markets
RBA research suggests options for IMF to overcome governance issues
Analysis of constraints on IMF actions suggests seeking backup from other international organisations could add to political clout, but quota reform remains a problem
Book notes: Emerging Africa, by Kingsley Moghalu
Sub-Saharan Africa is no basket case, but neither is it poised to follow China and India on their meteoric economic rise, Kingsley Moghalu argues in his forthright book
Ukrainian hryvnia drops 30% after central bank action
Currency in freefall after National Bank of Ukraine scraps subsidised forex auctions and simultaneously increases its key discount rate by 550bp
Basel Committee: Microfinance firms may far exceed supervisory capacity
Some banking supervisors may be struggling to cope with the vast number of small firms they are expected to oversee, finds a survey of the interaction between financial inclusion and regulation
Obstfeld warns emerging markets face dual trilemmas
BIS working paper dissects emerging markets’ ability to resist monetary policy spill-overs, finding the demands of monetary and financial trilemmas make self-defence difficult or impossible
Capital controls may do more harm than good: NBER paper
Working paper attempts to gauge the adverse effects of imposing capital controls, including segmented financial markets, more expensive capital, and reduced investment
World Bank research sees value in ‘acyclical’ remittances
Remittance flows show little correlation with the business cycle and therefore can play an important role in allowing consumption smoothing
BIS paper finds US spillovers impact through long-term rates
Researchers show US monetary policy spills over into Asian economies mainly through long-term interest rates and suggest policy options
Optimal policy changes as financial inclusion rises, BIS paper finds
Working paper presents evidence that both output volatility and inflation volatility fall as financial inclusion rises, but monetary policy will optimally lean more towards controlling prices
BIS paper spots correlations in capital control effects
Study of emerging market capital controls finds bonds flow into other regional countries if one loosens its controls, but the effect is weak when countries tighten
Bank for International Settlements sees danger lurking beneath exuberant markets
Recent rapid 'flip-flopping' by markets from risk-on to risk-off and back reveals fragility hidden beneath buoyant asset prices, and central bank interventions may make the problem worse
Bank of Russia vows to carry out ‘unlimited' interventions to defend ruble
Central bank returns to market less than a month after allowing currency to float; cuts interest rates on forex repos
Ruble's plunge sparks speculation of central bank's return to markets
Biggest daily drop since 1998 presages next week's rate hike, say analysts; ruble surpasses Argentine peso as worst performing emerging market currency of 2014
Central Bank of Nigeria raises stakes with rate hike
Bank loosens grip on falling naira but governor ‘committed to stable exchange rate'; warns drop in oil price is permanent and depreciation could continue
Nigerian central bank scrutinised over currency troubles
As the naira continues to weaken, analysts argue central bank blunders earlier this month have added fuel to the flames ignited by rising oil prices; MPC expected to hike rates tomorrow
Dealing with an age of turbulence in emerging markets
Nigerian deputy governor details the options available to emerging markets when reacting to changes in developed-world monetary policies and associated fund movements
BIS paper warns Basel III likely to prove ‘challenging’ for emerging markets
Working paper points to a number of obstacles to implementing the Basel framework in emerging markets and developing economies, and suggests potential solutions
BoE’s Forbes says financial ‘deglobalisation’ has upside
Kristin Forbes highlights ‘massive contraction’ in global bank flows as main factor reversing financial globalisation, resulting in both positive and negative effects on the UK economy
Hélène Rey warns advanced economies are not safe from US spillovers
Leading economist says spillovers from US monetary policy affect both advanced economies and emerging markets, weakening domestic policy; NY Fed's Bill Dudley responds
MAS chief sees SWFs struggling with secular stagnation
Ravi Menon urges sovereign wealth funds to move beyond traditional asset classes to tackle diminishing returns