Financial crisis
Systemic risk in Europe heightened by Target trap
Huge Target liabilities may explain why Germany sanctioned proposals for ECB bond-buying and the formation of the ESM. But this will not solve Europe’s problems
BIS research identifies ways to smooth the financial cycle
Bank for International Settlements working paper designs model of financial cycles and examines the difficulties of reducing the size of their peaks and troughs
Taming the finance monster
The best way to resolve global financial instability is for the owners of capital to assert themselves, with sovereign funds well positioned to take the lead, say Paul Woolley and Dimitri Vayanos
Fin paper assesses eurozone’s fiscal planning
Research finds countries on the periphery had adjusted their budgets before the euro crisis event; others were more reactive and may have suffered as a result
Ingves explores common characteristics between crises
Riksbank governor says liquidity measures are only temporary solution; warns government deficits are unsustainable
European fiscal stimulus assessed by Fed paper
Economic Recovery Plan had a sizeable but short-lived impact on GDP
IMF’s Lipton cools recovery talk
Greater euro area and US progress is needed to avoid another global downturn; more co-operation required on regulatory reform
International reserves provided shelter from crisis, says Finland paper
Bank of Finland study says the accumulation of international reserves provided some countries with a buffer against the crisis; not such a clear-cut relationship with economic growth
IMF study analyses Asian monetary policy channels
Research published by the IMF examines monetary policy transmission mechanisms in Asia; questions whether interest rates are determined by global factors
Polish paper says euro would have destabilised economy during crisis
National Bank of Poland research examines how adopting the euro would have changed the impact of the financial crisis; fixed exchange rate would have exposed economy to greater shocks
Bank of Finland’s Honkapohja gets second five-year term
Seppo Honkapohja reappointed for a second five-year term on the board of the Bank of Finland; only three board members of a possible six currently in office
ECB working paper examines causality in crises
A study published by the ECB investigates where causality lies between banking, debt and currency crises; also compares the duration of each
Policy-makers debate how to restore trust in the financial system
Andrew Tyrie among speakers at BBA conference discussing how to develop greater trust in the financial system, ideas range from greater competition to code of conduct for bankers
Tyrie to scrutinise draft of UK’s Banking Reform bill
The UK’s Banking Reform Bill published today will undergo parliamentary scrutiny; Andrew Tyrie concerned important details are being left to secondary legislation
IMF paper untangles liquidity indicators
A study by IMF staff finds price and quantity indicators can be used to separate the effects of supply and demand shocks on global liquidity; changes especially telling in a crisis
Malaysia’s Zeti says Asia must prepare for ‘new global landscape’
Zeti Akhtar Aziz highlights challenges due to the changing world economy following the financial crisis; says Asia is ‘well ahead’ with implementing financial stability policies
IMF paper considers monetary union risks
Research published by the IMF compares the trading benefits and stability costs of entering a monetary union; highlights flaws in Emu set-up
ECB paper examines ability of central banks to tackle dual liquidity crises
ECB study investigates how different monetary regimes impact on the ability of central banks to contain dual liquidity crises; finds less interference equates to more action
San Francisco paper studies effect of crisis on potential output
Federal Reserve Bank of San Francisco study examines US output potential; distinguishes between long-running trends and consequences of financial crisis
Monetary easing does not prompt crisis recovery, says BIS paper
Paper published by the Bank for International Settlements finds monetary easing does not help economic recovery following a financial crisis downturn; deleveraging produces more positive effects
CBP panellists raise concerns over macro-prudential innovation
Central Banking Publications webinar participants debate challenge of implementing macro-prudential policies; panellists highlight risks from central banks’ limited experience with some tools
Research warns of global liquidity trap
Smithers & Co report says quantitative easing unlikely to boost demand due to worldwide liquidity trap; calls for fiscal stimulus but says such action is not expected
ECB paper analyses factors driving portfolio flows
Working paper studies time-varying drivers of capital flows to emerging markets; finds investors are more sensitive to local factors during market stress, while extreme stress can cause a panic
ECB’s Cœuré justifies use of non-standard policy measures
Benoît Cœuré explains threat to the interest rate channel created need for alternative monetary policy measures; says outright monetary transactions aim to restore ‘monetary dominance’