Market function
CBDC may be ‘necessary’ to safeguard competition – BoC paper
Authors make case for “public digital payments” as tool to boost competition and innovation
Should the Fed’s Fima facility be made permanent?
The emergency repo facility reassures reserve managers about access to dollar cash during a breakdown in the US Treasuries market
Bank regulation can ease non-bank distortions – BIS paper
Authors challenge common narrative that bank regulation can worsen non-bank instability
Central bank of the year: The Federal Reserve System
Overwhelming Fed interventions in March 2020 forestalled a damaging global financial crisis, as policy overhaul prompts introspection in Europe and Japan
Pandemic likely to worsen market concentration – IMF research
Authors warn rising market power tends to impair monetary and fiscal policy
Central banks must become ‘market-makers of last resort’ – BoE’s Hauser
Measures used in Covid-19 crisis are insufficient for the long term, BoE official says
FSB to tackle systemic risk in non-bank sector
Regulation likely but policy-makers want to avoid damaging an important funding source
Quarles: policy-makers have ‘work to do’ on non-bank fragilities
FSB chair outlines areas where non-banks may have amplified the Covid-19 shock
Milgrom and Wilson share economics Nobel Prize
Auction theorists win this year’s prize for discoveries “of great benefit to society”
BIS warns of gap between market valuations and reality
Corporate credit spreads have tightened, despite what the BIS sees as a looming solvency crisis
James Bullard on the Fed’s policy review, FSOC and forecasting jobs data
St Louis Fed president discusses his support for average inflation targeting, his concerns about US Treasuries market function, non-bank regulatory weakness and negative rates, as well as the unexpected success in using Homebase data to predict highly…
EME financial markets are still vulnerable – BIS paper
Covid crisis has shown further market development work is needed, writes head of CGFS secretariat
UK debt office narrowly avoided disorderly market in March
DMO chief says BoE intervention triggered rapid recovery; debt issuance now running at record levels
Fed poised to purchase corporate bonds next week
New York Fed will create a portfolio to track the US corporate bond market under new plans
BoE’s Cunliffe: central banks must consider market liquidity backstop
Markets weathered the first phase of the Covid-19 crisis, but not without support, deputy notes
BoE’s Hauser: Covid-19 forced “largest and fastest” actions ever
Executive director gives blow-by-blow account of how the BoE tackled the Covid-19 crisis in the markets
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’
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
US MMFs transmitted Covid-19 stress to banks – BIS research
Banks outside the “epicentre” of the dollar squeeze still felt the effects, researchers say
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
El-Erian on Covid-19 policy risks, ‘zombie’ markets and central bank capture
Former Pimco chief says Fed move into high yield is a step too far, new rules needed on leverage and false liquidity, and narrow window emerges for central banks to shed some of their policy load
Richmond Fed paper examines use of discount window
Facility not typically used in “life or death” scenarios, researchers find
PBoC takes on regulation of key financial infrastructure
Chinese central bank to take bigger role in regulation as country seeks to improve financial infrastructure