Monetary policy
Bank of Ghana starts to unwind tight monetary policy
Central bank slashes interest rates to 23.5% in largest cut since 2010; inflation shows signs of improvement but certain risks still loom over prices
Extended monetary easing in US has larger impact abroad – paper
IMF paper examines the impact of periods of prolonged monetary easing on risk-taking behaviour; leverage ratio and other measures of vulnerability increase
Book notes: Competition and Stability in Banking, by Xavier Vives
Xavier Vives has written a fascinating book that highlights many important issues in banking regulation. But there are some flaws in his argument
Women on policy boards support prudent decision-making – research
Paper examines the impact of women on monetary policy decision making; authors’ results reveal the presence of women tends to lead to more “hawkish” decisions
PBoC appoints two to monetary policy committee
Guo Shuqing and Ding Xuedong join policymaking panel in reshuffle of senior officials
Third of businesses think investment has been ‘too low’ – BoE survey
Bank of England publishes results of survey of UK firms in latest quarterly bulletin; businesses experienced both real economy and financial “obstacles” to investment
Turkey keeps tightening with secondary instruments
Hike in late liquidity facility gives room for further tightening, as the central bank responds to inflation hitting double figures
BoE’s Forbes dissents as inflation looms
MPC member votes for 25bp hike as inflation looks set to exceed target until “at least” 2020; other members sitting on the fence, for now
Fed delivers 25bp hike
Fed makes rate hike that many FOMC members have been hinting at for weeks; committee gives bullish signals on the outlook
IMF research uncovers ‘puzzling’ effect of QE on the current account
Authors see QE having significant impact only when capital mobility is low; findings suggest “unexplained variation” between QE and capital mobility
Tanzanian central bank slashes discount rate
Central bank cuts discount rate for the first time since 2013, from 16% to 12%; increase in NPLs has discouraged commercial banks from lending
Finnish paper analyses Chinese central bank’s ‘window guidance’
PBoC may have to move away from using lending quotas, researchers argue
CBRT under pressure as inflation breaches 10%
Consumer prices rising at their fastest rate since 2012, leaving the central bank in a difficult position
RBNZ’s Wheeler: policy now has ‘neutral bias’
Risks to future rate movements “equally weighted”, governor says, though plenty of domestic and global risks could knock the outlook off course
Interest rate effects weaker at low levels – Borio and Gambacorta
Supply of loans becomes less responsive to policy rate movements when interest rates are already very low, likely due to impact on bank profits, authors say
Fed needs quarterly monetary policy report, Bullard says
St Louis president argues for better Fed communication when it comes to monetary policy decisions; a quarterly report would align the US with international best practice
Bank of Italy paper looks at impact of monetary policy shocks
The impacts of eurozone and US shocks have diverged since the onset of the financial crisis, the working paper says
Fed could raise rates ‘fairly soon’ – minutes
Minutes show committee members will be watching labour and inflation data very closely; raising rates would offer “flexibility” in responding to economic changes
Plummeting inflation prompts Bank of Zambia action
Central bank cuts policy rate by 150bp, in addition to a cut to the overnight lending rate and reserve ratio; inflation falls from over 18% to 7% in a matter of months
Uncertainty about momentum in the labour market – RBA minutes
“Mixed” picture in Australian labour market shows unemployment increasing alongside full-time employment; spare capacity likely to persist “for some time”
Fed’s Mester says public should not hold policymakers to ‘unrealistic account’
Monetary policy cannot and should not be used to spur productivity growth, says FOMC member; unwinding of Fed’s mortgage portfolio may help guard it against calls to enter the realm of fiscal policy
IMF praises BCEAO’s latest policy actions
Latest round of measures will result in stronger banking sector, mission chief says; rejuvenation of interbank market will help monetary policy effectiveness
Fed’s Williams says labour market figures are accurate
Current unemployment rate “accurately” reflects the state of the labour market; San Francisco Fed researches a broader measure of the market
Central bank of the year: Bank of England
The BoE has undergone a major restructuring that has reshaped its organisational framework, research and public interaction – leaving it well positioned to meet the challenges ahead after a tough year