Eurozone
Slovenia report simulates effects of structural reforms
Report by local institute, in co-operation with the central bank and OECD, argues the time is “ripe” for structural reform in Slovenia; suggests long-term benefits outweigh short-term costs
TLTRO II may reflect renewed ECB focus on transmission, analysts say
The European Central Bank’s decision to operate a second targeted long-term refinancing operation would help provide banks with ‘stability’, according to Draghi
Kaplan to ‘closely monitor’ debt and ageing demographics in line with growth
Dallas Fed president will also look to other major economies throughout 2016 for patterns that may affect growth; the Federal Reserve will need to be patient, he says
Eurozone sovereign debt crisis has increased financial fragmentation, paper argues
Eurozone corporate bonds have different risk premia according to which country a company is headquartered in, paper argues; fragmentation has ‘dampened effectiveness’ of ECB policy
Book notes: Stabilising capitalism: a greater role for central banks, by Pierluigi Ciocca
Pierluigi Ciocca offers an excellent, brief and crisp account of the main issues facing central banks today
Tighter quality standards on banknotes not needed, DNB paper suggests
The Netherlands Bank maintains the European minimum standard for sorting euro banknotes, as study sees no reason to impose stricter requirements
Debt repayment problems have ‘severe consequences’ on consumption, paper finds
Quarterly consumption 30% lower when debt repayment problems arise, research suggests, while recovery after the arrears is smaller than the initial decline
ECB ‘actively considering’ whether to scrap €500 note, Cœuré says
Executive board member says he finds arguments in favour of keeping highest denomination note ‘less and less convincing’, as evidence mounts of its role in corruption and crime
BoE’s Cunliffe wants more detailed timetable for European reforms
Bank of England deputy governor welcomes ambition and honesty of five president report, published in June; hopes to see more detail on dates in future
People: Mozambique deputy moves to airline; Mervyn King joins Aston Villa FC board
Bank of Mozambique deputy moved from central bank to national airline; former BoE governor joins premier league team board of directors; and more
Research compares borrower-based macro-pru tools
Debt service-to-income caps generate ‘less pronounced macro feedback’ in the short term than loan-to-value limits, working paper finds
Monetary policy does not ‘persistently impact’ bank lending, paper finds
Working paper published by Central Bank of Cyprus examines the impact of interest rate changes on both lending and credit risk
Research considers impact of fiscal consolidation on debt-to-GDP ratio
Working paper published by ECB finds fiscal consolidation conducted through a revenue increase, rather than a spending cut, is ‘self-defeating austerity’
Eurosystem reveals rules on national asset holdings
ECB publishes an agreement governing the size of ‘non-monetary policy holdings’ at national central banks in the eurozone; aggregate net financial assets totalled €490 billion at end-2015
Research considers why macroeconomic announcements impact asset prices
A working paper published by the ECB weighs the ‘intrinsic value’ of macroeconomic news announcements in the US, finding timing is crucial to maintaining it
ECB’s Angeloni wants analysis of macro-prudential measures ‘at some stage’
Supervisory board member says analysis will be important in the future, partly because it will help identify ‘scope’ of potential ECB actions
Buch enters reservation on common deposit guarantees
Bundesbank deputy says safeguards must be put in place before a eurozone deposit guarantee scheme can be established, even as Draghi welcomes progress on the scheme
Bank of Italy growth indicator ticks up
Italian central bank’s ‘timely’ index shows eurozone GDP growth continuing in December, with the indicator reaching triple its level of a year ago
Weidmann says clearer liability would strengthen eurozone
Bundesbank chief says important element of fixing the eurozone’s ills is reinstating the ‘principle of liability’, instead of resorting to bailouts
Issing says eurozone status quo is in danger
Former ECB board member says Europe’s monetary union is still plagued by problems caused by absence of political integration, which could pull the eurozone apart
ECB will 'review and possibly reconsider’ stance in March
ECB policy rates and asset-purchase programme remain unchanged, but Draghi says council was ‘unanimous’ in agreeing it should announce March review
ECB paper quantifies spillover from sovereign to corporate credit risk
Research studies direct spillover effects using credit default swaps and data on 226 firms from 15 European countries in aftermath of first Greek bail-out
Fewer counterfeit banknotes withdrawn in Portugal in 2015
Statistics released by Bank of Portugal reveal a drop in the number of counterfeits withdrawn from circulation last year; the €20 remains the most frequently faked denomination
Croatia makes it 25 central banks in Target2
The Croatian National Bank will, along with 24 commercial banks in the country, participate in the RTGS system from February 1, making it the fifth central bank outside the eurozone to join