Monetary policy
Tough tests ahead as Rajan prepares for RBI top job
Raghuram Rajan holds many of the skills required to govern the RBI, but he will face substantial monetary policy, governance and financial stability challenges, a new Central Banking article finds
Rajan faces daunting challenges as he takes over as RBI governor
Raghuram Rajan faces a raft of monetary policy, governance and financial stability challenges when he takes over as governor of the Reserve Bank of India next week, writes Hugh Sandeman
Sarb looks to rein in money market liquidity
South African Reserve Bank concerned that high levels of liquidity could threaten the monetary policy transmission mechanism; plans to drain excess cash over a number of years
Norwegian paper explores financial stability trade-off
Working paper identifies trade-off between increasing rates to mitigate financial imbalances and lowering rates to reduce the risk of bank insolvency
Surge in excess reserves drives overnight interbank rate to ‘floor of corridor'
Dynamics in the overnight money market are in line with ‘expected consequences of market stresses and unconventional monetary policies' according to RBA working paper
New Zealand opposition says RBNZ internal review backs case for more transparency
Internal review confirms New Zealand is an outlier in giving the Reserve Bank governor a monetary policy veto; Green Party says change in law should be 'non-controversial'
NY Fed blog post points to fiscal implications of Fed policies
NY Fed blog post notes Fed policy impact on government fiscal position is much broader than the direct influence remittances from Fed earnings have on government finances
Central Bank of Trinidad and Tobago unveils changes to monetary policy-making
MPC makes room for external members as frequency of policy meetings is cut in half; policy decisions to be announced on Friday evenings to avoid ‘kneejerk reactions' from the markets
Monetary policy and macro-prudential measures can make a ‘vicious circle'
Central banks must assess the risks of monetary and macro-prudential policies pulling in opposite directions and creating adverse outcomes, says former BoJ deputy director-general
Bank of Russia overhauls organisation as it prepares for expanded remit
Responsibility for financial regulation will shift from a government body to the central bank in September; the bank has also created new departments of monetary policy and statistics
Opinion: The ECB should not hold back from eurozone bond purchases
There is no danger in the ECB buying large amounts of eurozone government bonds to bolster market confidence – so long as the right conditions are met – says Natixis chief economist Patrick Artus
Getting to grips with monetary policy?
Global co-operation on monetary policy remains out of reach
Europe could learn from Germany’s macro-prudential approach
Germany’s approach to macro-prudential oversight could offer insights into how to democratise ‘hard’ policy tools and enshrine independence at a time when more power is being transferred to the ECB
Central bankers should be wary of their political bargain with government
Central bankers appear ‘spellbound’ by governments keen to give them new regulatory powers despite concerns about their ability to deliver either stable monetary or financial policy in the future
New central bank policy mandates could cause vicious feedback loops
The trend for central banks to take on mandates for prudential policy in addition to monetary policy could cause dangerous feedback loops in the absence of a well-defined risk appetite
RBA cuts growth forecast and suggests further easing could follow
Reserve Bank of Australia lowers its forecast for December’s growth rate; could follow up this week’s rate cut with another as labour market conditions weaken
Financial fragmentation persistent in face of loose monetary policy stance
ECB article provides evidence of heterogeneous interest rate pass-through in the four largest eurozone economies, based on new models
Romanian interest rates could fall yet further, says central bank
National Bank of Romania uses quarterly inflation report to signal it is likely to continue monetary easing, as inflationary pressures dissipate and growth remains weak
Peter Praet delves deeper into ECB forward guidance
The ECB executive board member explains why the central bank issued forward guidance and how it will work; emphasises the importance of money dynamics in determining future policy
RBA governor hints at additional easing
Glenn Stevens says Australia's inflation outlook may afford some scope to ease policy further if needed to support demand
PBoC removes lending rate floor
From tomorrow, Chinese banks will be able to price loans as low as they like - but in the short term the effect is unlikely to be felt as loans are generally priced above benchmark rate
EM central banks should take cue from ‘the best in the world', says RBI governor
Duvvuri Subbarao also highlights the historical differences in mandates between EM and advanced economy central banks
Bundesbank paper contrasts techniques for identifying monetary policy shocks
Discussion paper compares different methods for identifying monetary policy shocks; looks at use of VAR models and narrative time series
Bernanke: Past century shows ‘central banking doctrine and practice are never static'
Fed chief added recent crisis has underscored the need to strengthen and better integrate US monetary policy and financial stability frameworks