Monetary policy
Fed paper models impact of return to normal rates
Discussion paper studies the likely effect of returning interest rates to more normal levels; finds different combinations of tools would have different effects on financial intermediation
Bank of Korea turns focus to stability threats after rate cut
Bank of Korea cuts rates to historic low, but shift in language indicates growing concerns over financial stability
Plosser wants Fed to follow ‘rule-like’ monetary policy
Philadelphia Fed president says constrained discretion has been shown to produce better policy-making, citing Nobel prize-winning research
Fed minutes reveal growing rifts over forward guidance
Minutes show increased debate over whether forward guidance is being used correctly; two dissenters object to phrasing of policy statement
New York Fed’s Potter fleshes out normalisation plans
Vice-president responsible for open market operations gives details on how the Fed will use interest on excess reserves and reverse repos to raise its interest rate
Rates: BoJ maintains pace of asset purchases; RBA holds steady
Bank of Japan continues pace of asset programme despite some dissenters; RBA holds rates with growth persisting below target and signs of spare capacity
Lagarde sees black clouds over monetary policy normalisation
IMF managing director underlines risk of spillover effects as Fed winds down monetary easing; says ‘asynchronous’ normalisation could come back to bite advanced economies
NBP warns ECB-Fed mismatch may impair policy-making
Polish central bank says divergence of European and US monetary policy is likely to create problems for policy-makers elsewhere, especially in small, open economies
Peru governor says Fed ‘normalisation’ will help reverse domestic slowdown
Central Bank of Peru governor Jose Velarde says Fed has ‘probably not’ done enough to limit international spill-over, but growth in the US will partially offset a slowdown in China
Higher capital requirements lead to lower lending, study by Calomiris finds
Paper published today by the Bank of England finds ‘little evidence of interaction' between monetary policy and capital requirements; studies their impact on bank lending
EMs discuss monetary responses to policy spillovers in major BIS publication
BIS publishes result of wide-ranging emerging markets survey, finding that transmission channels have changed since the crisis and opinions differ on how to respond
Polish policy-makers sceptical over major central banks' monetary policy
Minutes from the latest meeting of the Polish monetary policy council reveal doubts that QE and ultra-low rates have had the desired effect
Monetarist view cannot explain eurozone inflation woes, Nobel laureate warns
Christopher Sims says lack of co-ordinated fiscal action dooms eurozone to prolonged lowflation, at German conference for economics Nobel prize winners
Robert Pringle's Viewpoint: Haldane plus Rajan = New model central bank?
Robert Pringle offers an alternative to Bank of England chief economist Andrew Haldane’s scenarios for the next 25 years of central banking
Firm-level characteristics affect monetary policy transmission, Czechs find
Working paper finds firm-specific characteristics like size, age, collateral and profit, affect the way in which monetary policy changes are reflected in the external financing decisions of firms
Lesotho holds policy as inflation grows in line with neighbour South Africa
Minimum target for international reserves kept at $610 million, which Lesotho's MPC says is consistent with price stability and currency parity with the rand
Paper examines optimal monetary policy for wages and hours worked
Firms tend to pay too little for too many hours, economists argue in ECB-published paper; monetary policy should not target inflation too strictly, they say
Book notes: Alexandre Lamfalussy, by Christophe Lamfalussy, Ivo Maes and Sabine Peters
This is a fascinating account of the life and career of a great European
Book notes: Deliberating American Monetary Policy, by Cheryl Schonhardt-Bailey
Using recordings of meetings of not only the FOMC but also of the House Financial Services Committee and the Senate Banking Committee, the book tries to understand how monetary policy is decided
Minneapolis Fed paper challenges New Keynesian ‘liquidity trap'
New model challenges dominant view of post-crisis monetary policy, claim Minneapolis Fed economists
Ireland working paper examines effect of ECB policy on interbank repo market
Research by economists from Central Bank of Ireland, New York Fed and Barclays Capital finds some substitution effect between official auctions and repo market activity
UK rates set to stay low, says former MPC member Wadhwani
The cost of tightening too late is far lower than that of choking the recovery, says former monetary policy-maker Sushil Wadhwani
BoE’s Haldane sees greater role for central banks as risks shift
Central banks may have to address different episodes of financial instability as risks shift from the banking sector to other financial players, says BoE chief economist Andrew Haldane
Two future paths for central banking
Andrew Haldane identifies two future worlds for central banks along with their implications for monetary policy, macro-prudential regulation, operations and transparency.