Interest rates
St Louis Fed: forward rates provide investors little advantage
St Louis Federal Reserve study says informational value of longer term forward rates provides no additional economic benefits
BoJ: low interest rates boost bank lending
Bank of Japan Economic and Financial Developments report says bank lending showing signs of improvement
Japan edges towards zero bound
Bank of Japan cuts benchmark rate to 0% to 0.1% range, announces further stimulus
IMF: Gulf bank balance sheets severely impaired by economic downturn
Fund study finds link between economic conditions in Gulf states and banks’ nonperforming loans in region
IMF: low income countries lack proper monetary policy framework
Fund study shows monetary transmission mechanism in low-income countries is less effective due to institutional deficiencies
Polish banking sector curbed growth in crisis
National Bank of Poland study shows banking sector played significant role in economic slowdown during financial crisis
Basel III could distort monetary policy: ECB’s Bini Smaghi warns
European Central Bank executive board member Lorenzo Bini Smaghi says Basel III may have unintended consequences on monetary policy
CEPR advocates rule-based approach to central bank projections
Centre for Economic Policy Research study says central bank projections based on interest rate rule yield same results as one on market expectations
Rate decisions this week
Majority of central banks stand pat as uncertainties persist over growth, price pressures; Iceland cuts while Turkey, Uruguay tighten policy
RBNZ’s Spencer: monetary policy will have more bite
Reserve Bank of New Zealand deputy governor Grant Spencer says cautious lending means monetary policy will have more bite than in previous years
BoE: consumption volatility explains global decline in real interest rate
Bank of England study shows lower global real interest rates caused by higher consumption volatility in traded goods
Price stability must remain top priority: SNB’s Jordan
Swiss National Bank’s Thomas Jordan flags difficulties in using monetary policy to counter financial imbalances
Money market rate best policy target: BIS research
Bank for International Settlements research finds lower macroeconomic volatility where central banks use money market rather than repo rate as policy target
Norway’s Gjedrem says return to inflation target will be delayed
Norges Bank governor Svein Gjedrem says weakness in growth will lead to concessions on inflation mandate
Peru raises reserve requirement in bid to stem capital inflows
Central Bank of Peru increases reserve requirement on overseas loans to 75%
SNB: money market rates best target during recessions
Swiss National Bank study shows money market-based monetary policy procedures create greater stability
Israel justifies rate hold
Bank of Israel minutes flag economic uncertainty as factor behind Governor Stanley Fischer opting to hold rates
Rajan, Krugman clash over Fed policy
Ex-IMF chief economist Raghuram Rajan and Nobel laureate Paul Krugman lock horns over Federal Reserve’s loose monetary stance
Impact of pledge to keep rates on hold unclear: Bank of Canada
Canadian central bank research says conditional commitment to keep rates low has had mixed effect; study shows pledge lowered interest rates on government bonds, but findings not statistically strong
Bank – CEPR Monetary Policy Roundtable
Summary of roundtable discussion comprising members of Bank of England and Centre for Economic Policy Research shows above-target inflation expected to be temporary
Why monetary base control can offer stability
There is a way of replicating the big achievements of the gold standard without going back to gold, argue Brendan Brown and Robert Pringle.
Rate round-up: Hungary, Israel hold on uncertainty
Continued uncertainty in global and domestic economy prompts Hungary, Israel to leave rates unchanged
Korea’s Kim: interest rate hikes had limited impact
Bank of Korea governor Kim Choong-soo says current monetary policy stance remains accommodative
Iceland slashes on strengthening króna
Central Bank of Iceland cuts rates by one percentage point as it prepares to buy foreign currency following króna gains