Monetary policy
Global value chains increasingly driving global inflation – BIS paper
Growth of global value chains limits the importance of domestic factors in creating inflation, complicating the jobs of central banks
Central Bank of Philippines to improve surveillance – Tetangco
Philippines has “ample” policy space to respond to risks, governor says, but monetary policy will only be enacted to prevent inflation deviation
Pablo Sánchez appointed to lead Central Bank of Bolivia
Academic to take over from Zabalaga after six years as president; latest IMF consultation highlights the disagreement with Bolivian authorities over independence and monetary policy
New data sheds light on policy spillover channels – BIS paper
Expanded data published by the BIS show how US dollar, euro and yen affect cross-border lending flows
Paper examines “puzzles” in monetary policy transmission
HKIMR paper highlights differences in monetary policy transmission between advanced and emerging markets; “puzzles” are more severe for emerging markets
Riksbank extends QE, despite dissent
Additional Skr30 billion of purchases takes Swedish QE programme to mid-2017; central bank cites continued risks to the outlook, but three members challenge decision
IMF paper shows US monetary conditions impact EM leverage
Impact is more pronounced for firms that are dependent on external financing, authors find; sample shows financial conditions have the ability to influence borrowing constraints
Icelandic paper finds evidence of rising natural rate
Authors attempt the notoriously difficult process of estimating the natural rate, using various models; rate appears to be on the rise
BIS: markets less beholden to central bank action
Political shocks appear to have jolted markets into a more healthy state, but it is not yet clear if this is the start of normalisation or a temporary phase
Riksbank’s Jansson rejects calls to scrap inflation target
Critics likely underestimate the benefits of the current monetary policy framework when calling for it to change, deputy governor says
Carney hits back at critics of monetary policy’s distributional impact
Monetary easing has disproportionately benefited the poor, BoE governor says; loss of open markets “would be a tragedy, but is a possibility”
Rate pass-through 'weaker and slower' in Mongolia – paper
Reforms at the Bank of Mongolia have improved the transmission mechanism, authors say, but there is plenty more work to do
BoE’s Vlieghe dismisses neo-Fisherian idea that low rates cause low inflation
MPC member says “small minority” of academics who suggest lower rates may cause low inflation do not present particularly compelling arguments
Central banks may be partly to blame for low real rates, says BIS’s Borio
Ever-bolder attempts to raise inflation could push down on real rates, generating little inflation but worsening the risk of instability, Claudio Borio says
Impact of interest rate cap still unclear – Kenyan governor
There is not enough data on interest caps to influence the MPC’s decision, says Njoroge; interest rates remain on hold at 10%
Banks have still not fixed ‘poisonous mix’ of problems – BIS’s Borio
Claudio Borio warns that in some respects, banks have still not solved the problems revealed by the 2008 crisis, which leaves them vulnerable
Mauritian governor explores low-growth puzzle
The government and the central bank need to work together in order to stimulate growth, Roi says, recognising each institution can only do so much
Stiglitz urges central banks to focus on credit, not interest rates
Emphasis on interest rates ignores more important question of whether credit is getting where it is needed, Nobel economist argues
Turkish central bank hikes as Trump election hits lira
Turkish lira has been targeted in emerging market currency sell-off; rate hike ignores the latest call for more cuts from Turkish president
Central Bank of Honduras legislation needs to be ‘fast tracked’, says IMF
Implementation of inflation targeting regime hinges on legislative change, IMF says in latest report; Honduran authorities to submit legislative reform on central bank mandate by March 2017
Demands on central banks have created critical juncture – El-Erian
Economist says burden placed on central banks has created economic and political instability across the globe, and something must soon give
BoE’s Cunliffe: central banks not causing low natural rates
Quantitative easing has not caused rates to fall, but is rather responding to a low natural rate, deputy says; the fall in sterling could require deviation of the policy rate from the natural rate
Bank of Italy publishes unconventional monetary policy papers
Papers and presentations cover models and data on unconventional programmes
Paper examines relationship between monetary policy and bank funding crises
Current regulatory tools are not sufficient to contain bank runs, Canadian working paper suggests, underscoring the importance of policy measures such as reserve requirements