Monetary policy
IMF working paper explores spillovers between United States and eurozone
Spillovers from the eurozone to the US have been ‘considerable’ since 2014, reflecting policy easing in Europe, IMF paper notes
Lagarde calls for ‘policy upgrade’ across the globe
Managing director of the IMF tells advanced economies to ‘fully incorporate’ spillovers in decision-making, and eurozone to tackle problem with non-performing loans
Global factors harming domestic policy transmission in Asia, IMF research finds
Authors find global factors help to explain why bank funding in Asian economies has such a limited role in transmitting monetary policy
Botswana research weighs impact of various instruments on credit
While interest rates may be more effective at influencing credit than reserve requirements, more ‘direct’ macro-prudential measures could be even better, Botswana article finds
ECB paper considers how to mitigate US spillovers
Global economies could mitigate their vulnerability to US monetary policy decisions through a range of different policy actions, research finds.
Norway signals further easing as it cuts again
Norwegian central bank looks to cut rates further with inflation set to fall back to 2% over the forecast horizon
Riksbank paper takes stock of macro-prudential landscape
A survey of the empirical literature on macro-prudential policy says various tools work best in different contexts; more research is needed on combining macro-prudential and monetary policy
SMEs possibly worst hit by fragmentation of monetary policy transmission, ECB paper finds
Small and medium enterprises may have suffered most from fragmentation in monetary policy transmission following the financial crisis, according to research
Riksbank research suggests inflation correlated with policy rate in some cases
Research by two Swedish economists uses the work of Irving Fisher to illustrate how low policy rates might be leading to low inflation in some countries; cites Irving Fisher for causal explanation
IMF staff identify ‘priority areas’ for SSA reform
Staff members in the IMF African department chart the progress of financial development in sub-Saharan Africa, the challenges that remain and how they might be addressed
ECB bulletin: risks to taxpayer funds gradually diminishing
An article in the European Central Bank's latest bulletin weighs the fiscal impact of financial sector support during the crisis, highlighting the benefits of a move towards banking union
National Bank of Denmark confident it possesses ‘necessary tools’ to defend currency
The ministry of finance will resume issuing government bonds in October after measures to stabilise the krone have ‘desired effect’
BoE’s Forbes calls for rethink of exchange rate pass-through
MPC member outlines new, more nuanced approach to measuring the exchange rate’s impact on inflation, noting this implies rates could need to be tightened sooner than older models suggest
Flaws in banking laws common across countries, working paper finds
IMF working paper examines the weaknesses in specific banking laws, concluding they are not country specific; seeks to provide a blueprint for ways to improve
Bank of England wary of China risks but UK outlook steady
The MPC’s view is not materially affected by recent volatility in the financial markets as it keeps policy on hold; domestically, an increase in wage growth is offset by higher productivity
RBA deputy welcomes ‘considerable’ exchange rate adjustment
Philip Lowe says flexibility of the exchange rate, labour market and monetary policy have helped Australian economy adjust to ‘downswing’ in commodity prices and mining investment
Negative rates working as planned, says Riksbank’s Cecilia Skingsley
Transmission of negative rates is working well and there is room to ease further, deputy governor says, despite the possibility of unwanted side effects; changing inflation target a ‘bad idea’
National Bank of Kazakhstan sets base rate for first time
Central bank sets new benchmark interest rate at 12% in first monetary policy meeting under inflation targeting framework
BIS’s Borio says current account obsession obscures important results
Focus on current account imbalances obscures many important – and often counterintuitive – results about global financial flows
National Bank of Denmark calls end to crisis measures
Central bank has moved from buying to selling foreign exchange in recent months, opening up room to return deposit limits to more normal levels and re-start government bond issuance
Turkish central bank eyes return to normality
Central bank plans to return to a simpler, more conventional monetary policy framework, but politics may yet get in the way
Capital controls ineffective at handling policy trilemma, ECB paper finds
Emerging market capital controls have a limited impact on monetary policy trilemma variables and come with spillover effects, the authors warn
PBoC steps in with rate cuts
Central bank cuts interest rates and reserve requirements amid deepening crisis, and uses the opportunity to push liberalisation agenda
Falling real rates put US ‘at risk of financial instability’, says Kocherlakota
Minneapolis Fed president warns that long-run real interest rates are falling and risk causing financial instability and ineffectual monetary policy