Eurozone
The complex art of reserve management
Lockdown represents another inflection point for central banks managing $12 trillion in FX reserves
French governor says ECB could directly fund loans
Villeroy de Galhau also calls for flexible emergency purchases but rules out yield curve control
Lagarde welcomes Franco-German fund plan
Covid-19 response fund would be drawn from common EU budget
The ECB, the lockdown and the monetary financing lock
Eurozone’s central bank may need to break its prohibition on monetary financing to fight pandemic
German court rules ECB must provide more evidence on PSPP
Judges strongly criticise ECJ’s ruling on QE programme, but stop short of declaring it unlawful
Debts, deficits, central banks and inflation
What insights can history provide for central banks hit by large rises in government debt?
ECB publishes framework for assessing prudential spillovers
Detailed paper aims to help regulators assess cross-border effects of macro-prudential policies
Joining banking union likely positive for Sweden – Riksbank
Large cross-border activities mean common supervisory and resolution mechanisms better than national equivalents
Most eurozone states experience fiscal spillovers – ECB paper
Eurozone fiscal policy may be especially effective when rate changes have little impact, paper says
Book notes: Crisis spaces, by Costis Hadjimichalis
“Don’t buy this book, unless you are a dedicated Marxist”
People: Sarb and BoE renew senior appointments
Senior Sarb and BoE officials receive new terms; MAS picks new assistant managing director; and more
Dutch former governor attacks PM for blocking eurobond
Nout Wellink says Netherlands must prevent further debt crisis in Southern European countries
ECB paper looks at euro exchange rate shocks
Exogenous exchange rate shocks having more impact on eurozone inflation, researchers find
Fed expands network of swaps to emerging markets
Emerging markets will now have direct access to a dollar backstop, but it is still limited
Central banks and banks: a changed relationship
Development of large, complex international capital markets has reshaped relationship between central and commercial banks
ECB mulls wider clearing house access to account facilities
Including CCPs in the Eurosystem may remove the need for them to seek a banking licence
Inflation targets back in the spotlight
Monetary policy can do little to offset impact of Covid-19
Trust is crucial to eurozone interbank markets – ECB paper
More bank failures or longer-lasting crises lead to smaller interbank markets, researchers find
Why Bulgaria needs to deepen its currency board
Bulgaria’s currency board rules should be extended to transaction deposits at commercial banks
Weak eurozone banks hindered monetary policy – Bundesbank paper
“High-risk” banks failed to increase loan spreads despite ECB liquidity injection, researchers say
BoE paper highlights non-linearities in bank funding and solvency
Results could be important consideration in stress-test design, authors say
Schnabel takes on Germany’s ‘false narratives’ on ECB policy
Criticism based on “half-truths” imperils trust in single monetary policy and “undermines European cohesion”
Bulgaria: long live the currency board
Bulgaria should reject the euro and extend its currency board to cover bank deposits
ECB paper looks at professional inflation forecasters
No statistically significant evidence of some forecasters being worse than others, researcher says