Financial crisis
Central banking enters a new era
Central banks face a delicate balancing act to preserve their reputations as they evolve into ‘buyers of last resort’ and some of their actions appear functionally equivalent to ‘monetary financing’
Georgian central bank launches liquidity support for SMEs
New programme will supply liquidity to commercial banks in exchange for loan collateral
Stress levels rising: investment funds and the Covid-19 shock
Extreme market stresses due to Covid-19 are underscoring the central role non-banks play in crisis contagion, as in 2008. Were regulators better prepared this time?
Campos Neto on reforming Brazil’s economy amid Covid-19 distress
The Central Bank of Brazil governor speaks about how Brazil is managing fallout from the coronavirus pandemic, the benefit of large reserves, his plans to deploy emergency asset purchases and why he favours extending the IMF’s SDR funding
Riksbank launches new financial vulnerability metric
“Systemic risk indicator” is designed to track overall financial stability across market segments
The complex art of reserve management
The coronavirus lockdown represents another inflection point for central banks seeking to optimise the management of their $12 trillion in FX reserves
FOMC considers more aggressive forward guidance
Officials discussed state-contingent forward guidance and yield curve control, April minutes show
Swedish financial stability risks rising, Riksbank says
Without new policy measures, banks’ losses may hamper credit supply, Riksbank warns
Economists debate monetary financing of China’s government debt
PBoC adviser dismisses idea of monetising government bonds despite calls from Ministry of Finance think-tank
The ECB, the lockdown and the monetary financing lock
The eurozone’s central bank may need to break its prohibition on monetary financing to fight the pandemic
Fed flags ‘elevated’ risk of financial stability pressures
System coped with immediate Covid-19 stresses, but trouble may be building, central bank says
PBoC’s post-pandemic policy is still up in the air
The Chinese central bank has resisted radical easing, but with the NPC meeting this week, more loosening could be on the way, despite debt-level concerns, writes Hui Feng
Bank of Canada warns of major rise in mortgage arrears
Mortgage arrears could rise to levels nearly double seen in global financial crisis, central bank says
Banks are ‘inherently unstable’, BIS paper finds
Researchers study the many roles banks play and find all of them tend towards instability
Fed set to adopt ‘elements’ of price-level targeting
Covid-19 could act as a catalyst for a Janet Yellen-supported Fed move to adopt elements of price-level targeting. But questions remain about the timing of such a move
Book notes: In the combat zone of finance, by Svein Harald Øygard
A fascinating and readable book for those charged with maintaining financial stability and interested in a new perspective on institutional efficiency
Dominican Republic governor opposes ‘inadmissible’ pension proposal
Allowing workers to withdraw savings could create long-term crisis, Héctor Valdez Albizu warns
Lebanese PM asks for IMF aid as dispute with central bank grows
Governor at centre of massive economic crisis appears to condemn PM’s words as “slander”
Carbon tax spike could spur global recession – S&P
Higher carbon prices would trigger widespread industry defaults, says agency research unit
Dutch pension funds record heavy losses – DNB
Major pension funds warn they may have to cut payouts unless finances improve soon
BIS paper flags ‘barren patches’ in post-crisis reforms
Reforms have boosted “shock-absorbing capacity” but some problems persist, authors say
Book notes: Crisis spaces, by Costis Hadjimichalis
“Don’t buy this book, unless you are a dedicated Marxist”
Policy-makers making risky ‘one-round bet’ on Covid-19 – El-Erian
Former Pimco chief worried about readiness and ability of policy-makers to tackle a ‘second wave’ of infections
Financial resilience may be tested further by Covid-19 – IMF
“Sudden stop” in credit markets could feed back to real economy, and requires a “forceful response”