Interest rates
Portuguese paper questions efficacy of fiscal policy at zero lower bound
Working paper finds that government and private consumption are substitutes when the nominal interest rate is at the zero lower bound; this reduces impact of fiscal policy on output by a third
Top Fed officials speak out to calm markets
Two Federal Reserve governors and the New York Fed president emphasise a change in monetary policy will be driven by data, not the date; further easing remains a possibility
Fed's Stein clarifies unemployment ‘threshold' for rate change
Permanent FOMC voter seeks to provide extra clarity over Bernanke statement last week; emphasises that interest rates could stay at rock-bottom even if unemployment falls to 6.5%
Hungarian inflation bound for 3% target after central bank cuts again
Hungarian National Bank cuts benchmark interest rate by 25bp for 11th successive meeting; forecasts that inflation will pick up in 2014 and hit target the following year
Caruana backs Bernanke taper timetable but warns banks to prepare for volatility
BIS general manager says Fed chairman Ben Bernanke was right to signal a tightening of monetary policy but warns stress tests will be needed to prepare banks for an increase in volatility
Bank of England concerned by ‘vulnerability’ to interest rate increases
Financial Stability Report calls for assessment of financial institutions' exposure to increases in global interest rates; recommends banks are allowed to reduce their liquid asset holdings
Financial institutions must prepare for higher interest rates, says Carney
Incoming Bank of England governor calls for ‘continued vigilance’ to avoid the financial system being caught out by volatility and interest rate rises caused by an exit from easy monetary policy
BoE research warns of self-fulfilling prophecy in 'speed-limit’ monetary policy
Working paper says targeting rates of change may not be as beneficial as some studies have suggested; could cause interest rates to become ‘pinned’ at the zero lower bound
ECB is capable of negative rates - but consequences are uncertain
ECB executive board member Yves Mersch says dangers include financial innovations to ‘emulate currency and allow tax avoidance' if deposit rates are moved below zero
Fed research models optimal monetary and fiscal policy under uncertainty
Discussion paper seeks to improve on previous models by introducing uncertainty; finds it is optimal for the government to spend more at the zero lower bound under uncertainty
ECB keeps SME measures ‘on the shelves’ and holds rates alongside BoE
Draghi says further unconventional measures were discussed at today’s meeting of the governing council, but are being held in reserve; ECB joins Bank of England in taking no policy action
Bank of Israel’s outgoing chief, Stanley Fischer, on the challenges of central banking
Stanley Fischer believes his work as governor of the Bank of Israel is done. He tells Chris Jeffery about the reform process in Israel as well as the challenges facing the world economy and the IMF
BIS warns central bank easing is fuelling equity markets
The latest quarterly review released by the Bank for International Settlements (BIS) finds that markets are ‘under the spell’ of central banks
Bank of Thailand rate cut aims to boost demand, not weaken baht
BoT makes clear its move was driven by disappointing economic growth, and not aimed at weakening the currency as the government would like
Israel cuts rate for second time in two weeks
Bank of Israel cuts benchmark interest rate by 25 basis points for second time this month as global monetary easing ‘accelerates’
Sarb and Nigeria hold steady as Ghana hikes rates 100bp
Bank of Ghana responds to inflationary threat with one percentage point rate rise, in addition to changes to affect policy transmission; Sarb and Central Bank of Nigeria see threats but hold steady
IMF paper refines measurement of monetary policy transmission
Working paper breaks monetary policy into endogenous and exogenous changes, finding this is an important distinction for explaining variations in policy transmission across banks
Israeli committee split over rate cut, minutes reveal
Governor Stanley Fischer used casting vote to keep May rate cut to 25bp after half the monetary committee called for a sharper reaction to tackle the appreciating shekel
Riksbank deputy appointments boost easing hopes
Martin Flodén and Cecilia Skingsley selected as new deputies; seen to shift the executive board in a more ‘dovish’ direction and increase the chances of a rate cut
RBA minutes show rate cut decision made in spite of home loans growth
Australia's monetary policy decision-makers judged it was time to use ‘some of the scope' they have to loosen monetary policy, given the steady inflation outlook
Sri Lanka cuts rates 50bp in defiance of IMF advice
Central bank cuts benchmark interest rate by 50bp to 7% as growth stutters and inflation falls; IMF warned yesterday against ‘further easing of monetary policy in the near term'
European rates: UK and Norway on hold as Denmark and Poland cut
Bank of England marks time ahead of Mark Carney’s arrival and Norges Bank keeps policy steady, while Denmark and Poland take action
Korean rate cut follows global trend but takes analysts by surprise
Base rate cut of 25 basis points by Bank of Korea aims to boost inflation and employment, and halt the Korean currency's rise against the yen
RBA cuts rates to record low
Central bank seeks to encourage rebalancing of demand as mining investment heads for peak; analysts see further rate cuts on the horizon