Monetary policy
Bank of England handed new remit
UK budget embeds flexibility in MPC remit; suggests the committee adopts explicit forward guidance as a new policy tool; looks to expand funding for lending scheme
BIS says fundamentals lagging behind market sentiment
Quarterly review identifies ‘renewed sense of optimism’ in financial markets; also sees move away from safe havens to riskier assets as central bank easing continues
Central banks ‘are not done easing yet’, says Morgan Stanley chief economist
US investment bank’s Joachim Fels says central banks are entering into a third stage of monetary easing; eurozone growth forecast cut to -0.7%
BoJ changes represent the death knell for central bank independence
The growing policy crisis caused by central banks taking on roles beyond price stability and lender of last resort is not down to 'independence' – as the BoJ case points out
Vietnam central bank needs clearer mandate not independence
The Vietnamese government should worry less about meeting calls for more legal independence for the State Bank of Vietnam and think more about relieving the central bank from some of its wide-reaching responsibilities, says new Central Banking Journal…
IMF’s Shafik says communication is central banks' ‘most important tool’
Deputy managing director Nemat Shafik believes communication is the most valuable of central banks’ unconventional policies; highlights benefits of maintaining a disciplined message
RBNZ policy to be set by ‘governing committee’
Reserve Bank of New Zealand’s four governors will make all its monetary and financial policy decisions in a new committee
Monetary policy is ‘mirror image’ of financial shocks, says ECB paper
Study finds that monetary policy is effective in mitigating financial shocks because it is capable of reversing the impact of shocks on GDP and investment
Bank of Mongolia launches ‘interest rate corridor’
New monetary policy framework seeks to reduce volatility in short-term interest rates, improve transmission and make policy more transparent
Riksbank report deflects criticism over persistent below-target inflation
Economic commentary says low inflation is partly caused by factors outside the Riksbank’s control; argues tight policy cannot take all the blame for high unemployment
Thailand deputy defends rate hold in wake of appreciating currency
Pongpen Ruengvirayudh says surge in capital inflows is a cause for concern, but says abandoning inflation targeting would be ‘counterproductive’
Stockton’s Bank of England review offers forecasting lessons for central banks
The Stockton review of the Monetary Policy Committee at the Bank of England offers valuable lessons for central bankers and economists around the world.
Central Bank of Ireland economist says monetary policy will not save euro
Lars Frisell suggests loosening monetary policy in the eurozone is unlikely to have much effect on the distressed periphery; instead advocates risk sharing through common deposit guarantees
State Bank of Vietnam needs a single mandate not independence
Lessons from South Korea, Japan and the US indicate a single mandate would benefit the State Bank of Vietnam more than an IMF call for legal independence.
National Bank of the Kyrgyz Republic’s Zina Asankojoeva
Zina Asankojoeva is the first female governor of the National Bank of the Kyrgyz Republic. She speaks with Daniel Hinge.
Fed’s Powell and Rosengren hit back at ‘fiscal crunch’ research paper
Research suggests Fed is constrained by precarious US finances, but Fed governor and president offer alternative conclusions
Unorthodox monetary policy would not suit Hungary, says paper
Research finds that unconventional central bank instruments have successfully eased market conditions in developed countries, but would have little impact in Hungary
Polish paper extolls benefits of probability forecasts
Research finds forecasting technique that seeks to quantify the uncertainty surrounding economists’ predictions has ‘rich interpretation possibilities’
Norwegian paper suggests alternative to ‘conclusion-based’ interest rate decisions
Research examines the stories behind interest rate decisions; reveals benefits to voting on contributing elements as opposed to final level
UK’s Adair Turner advocates stimulus by ‘helicopter money’
Chairman of the UK’s Financial Services Authority says there are circumstances where monetary financing of government deficits is justified, calling for more serious discussion of the topic
IMF working paper calls for consistency in East African monetary policy
Study into monetary transmission mechanism in the East African Community finds policy tools often used in a contradictory manner
Robert Pringle’s Viewpoint: Assessing Masaaki Shirakawa’s legacy
The policies of outgoing Bank of Japan governor, Masaaki Shirakawa, have brought economic stability to Japan and are likely to be viewed favourably by future generations
RBA holds rates but suggests cuts could follow
Reserve Bank of Australia holds interest rate at 3%; governor says stable inflation would allow board to make cuts and boost demand if needed
Chilean board members wary of low inflation
Chilean wage growth is outstripping inflation; board members show concern but hold rates