Monetary policy
Virus outbreak prompts Bank of Korea rate cut
Deadly Mers virus a key factor behind central bank’s decision to ease policy as economic recovery shows signs of faltering
IMF paper urges central banks to adopt sharia-compliant facilities
Authors warn lack of sharia-compliant monetary policy tools is hampering efficient liquidity management among Islamic banks, but is an area that requires further research
BoJ paper outlines idea of ‘natural yield curve’
Curve defines level of natural rate of interest at all maturities; authors suggest it provides a ‘useful benchmark’ for the conduct of monetary policy
Jeffrey Frankel argues for NGDP targeting by EMs
Monetary economist says targeting nominal GDP could allow emerging and developing countries to more credibly establish a nominal anchor
Devising effective data strategies to help inform policy decisions
The publication of the Irving Fisher Committee’s report on good data practices offers the potential for powerful data sharing, but more work needs to be done at the tactical and practical levels
Assessing the value of financial stability reports
More than 90 central banks now produce financial stability reports. Emrah Uslu and Eyup Kahveci look at the various approaches they take as well as appraising their usefulness.
Central Bank of Iceland prepares for ‘substantial’ interest rate increases
Minutes show MPC grappling with uncertainty around pay increases but board members agree interest rates will soon have to move upwards sharply; one member dissented from rate hold
Riksbank risk survey flags concern over easing impact
Respondents warn of a slight deterioration in the outlook for financial stability after launch of further monetary easing, including higher levels of risk and lower liquidity
Pakistan completes shift to new policy rate
New target rate and tighter corridor aims to improve the transmission of monetary policy; central bank slashes rates as inflation continues to fall
BIS committees highlight broad monetary effects of regulation
Committees offer suggestions for mitigating the impact of new regulations on the conduct of monetary policy, but say the effects will largely be ‘limited and manageable’
Kuroda reviews QQE two years on
Bank of Japan governor says policy is working as intended, and even though inflation has fallen to zero, prices should soon ‘accelerate toward’ the 2% target
Kazakhstan proposes sweeping changes to monetary policy framework
Central bank plans root-and-branch reform of its monetary policy with move to inflation targeting to be accompanied by revamped governance, communications, economic modelling and more
Riksbank paper warns forecasts often overestimate inflation
Forecasting error has grown in recent years and tends to overstate inflation, paper says, even as first deputy governor says expansionary policy has contributed to rising inflation
Ingves draws lessons from Sweden’s economic history
Riksbank governor emphasises the close link between financial stability and monetary policy, while promising to take further action ‘with force’ if necessary
Gieve: BoE rate hike likely to hinge on election outcome
Former deputy governor John Gieve says victor in May 7 poll will impact BoE’s tightening decision; panellists warn of high uncertainty as no party likely to win outright majority
NBER paper challenges Rey’s monetary policy dilemma
Authors find evidence to support the continued existence of a traditional monetary policy trilemma, casting doubt on Hélène Rey’s theory that the trilemma has broken down
Riksbank ramps up QE
Asset purchase programme doubled but unexpected rate hold sees krona move higher; Riksbank highlights both signs of recovery and rising financial stability risks in new monetary policy report
Riksbank seeks greater clarity with redesigned monetary policy report
Shorter report aims to focus more on analysis and less on detailed data reporting, with new layout to boost readability; head of forecasting says design process drew on years of feedback
BoE minutes remind markets not to be complacent
Minutes show MPC firmly positioned for coming rate hike; economists suggest central bank may be warning markets they have overestimated willingness for easing
‘Abolish currency to eliminate lower bound’ argues Buiter
Former BoE MPC member and Citigroup chief economist says scrapping currency is one way to push interest rates deep into negative territory – although there may be more practical solutions
FX regulator probes AUD spike prior to policy announcement
Australia's authorities look into sudden moves in the Australian dollar's value ahead of RBA monetary policy announcements
The MPC process in light of the Warsh Review
The Bank of England’s revised MPC meeting schedule has some merits but will not add to transparency and raises the risk of news shocks, writes former member Charles Goodhart
Draghi defends ECB’s voting opacity
While extolling the virtues of central bank transparency, the ECB governor says not publishing a voting record allows members to support the overall decision despite privately disagreeing
Jacques de Larosière on the international monetary system and the eurozone
Central Banking’s Chris Jeffery speaks to former IMF chief Jacques de Larosière about efforts to restore the global financial system and challenges for the eurozone at the Central Banking Awards 2015