Market function
Ex-governor says Fed should use Treasury derivatives in crisis
Doing so could split response from monetary policy and hedge interest rate risks, argues Jeremy Stein
Finland’s Välimäki on the ECB’s monetary policy framework review
Bank of Finland board member Tuomas Välimäki discusses the benefits of a ‘hybrid’ balance sheet model to provide dependable structural liquidity without distorting markets
Ex-OCC chief Michael Hsu on the impact of an America-first agenda
The former acting comptroller of the currency speaks with Christopher Jeffery about the future of the US Treasury market, Fed independence, financial de-regulation, the Genius Act and international co-operation
Paraguay’s Carvallo Spalding on resilience and cutting its inflation target
The Central Bank of Paraguay (BCP) governor speaks about lowering the inflation target to 3.5%, opening up to foreign investors and promoting inclusion through digital payments
A fractured monetary system
US policy is encouraging a transition away from a dollar-led, rules-based order
IMF officials call for central clearing of sovereign bonds
“More work needed” to enhance structural resilience in core markets, researchers say
Malaysia’s Rasheed expects a “bumpy road” for EM currencies
Governor Abdul Rasheed Ghaffour says BNM will intervene if needed ahead of future Fed cut; rules out capital controls but has encouraged institutions to repatriate earnings
BNM’s Rasheed on inflation, growth and currency performance in emerging markets
Bank Negara Malaysia’s governor speaks about balancing inflation and growth, supporting the ringgit, multilateral currency settlement and greening Islamic finance
Most asset purchase programmes are winding down
Around a quarter of respondents have open APPs but most are shrinking
Defending the basis
Benefits of additional Treasury liquidity may outweigh potential intervention costs during a hypothetical panic, writes Joseph Wang
Lagarde calls for stronger EU securities and markets authority
ECB president stresses completing capital markets union is essential to deal with deglobalization, ageing and climate change
ECB: from a supply to a demand-driven floor?
Eurozone’s central bank expected formally to abandon corridor in forthcoming operational framework review
BoE launches first ‘system-wide’ stress test
Analysis will assess how banks and non-banks interact to amplify shocks
BoJ’s easing stance fuels yen undervaluation dilemma
Japanese policy-makers need to consider feedback loop that an undervalued yen has on cost-push inflation; reflect on YCC exit options in ‘broad perspective review’, writes Sayuri Shirai
Rule-setters need to heed their own advice
The US risks a reputation for failing to meet standards to which it holds others
BoE paper explores ‘anatomy’ of gilts crisis
Detailed account of crisis reveals contagion, concentrated risk and role of wider market players
Pandemic purchases averted ‘destabilising loop’, BIS finds
Central banks tended to use different tactics in advanced and emerging economies, report says
To repo or to buy? Non-bank liquidity backstops still elusive
BoE’s Hauser and Fed’s Logan flag major design challenges in building ideal market backstop
Can new BoJ governor Ueda maintain his neutral position?
Kazuo Ueda will face divided views on monetary easing and its growing side-effects when he takes office, writes Sayuri Shirai
Book notes: A monetary and fiscal history of the United States, 1961–2021, by Alan Blinder
The book’s breakthrough is its infusion of the history of fiscal policy into a theoretical framework traditionally focused on monetary instruments. It is a splendid and thrilling read
BoE’s Pill says government must ‘respect’ independence
Government and central bank have clashed over causes of UK’s gilt market turmoil