Monetary policy
Czech bulletin dissects monetary policy transmission
An economic research bulletin compiled by the Czech National Bank explores relationship between monetary policy and real economy in five articles
IMF flags growing risks from low interest rate environment
Global financial stability report urges caution by central banks employing loose monetary policy; says lack of adjustment to medium-term challenges could create ‘chronic phase’ of crisis
IMF's Blanchard warns Europe could drag world economy down
IMF chief economist says ‘three-speed’ global economy could be dangerous; World Economic Outlook urges central banks to keep policy loose but be ready with an exit strategy
World Bank says east Asia and Pacific at risk of ‘overheating’
Asia-Pacific policymakers urged to consider withdrawing stimulus – fiscal and monetary – as region’s larger economies reach their productive capacity and face inflationary pressures
FOMC members saw QE continuing ‘through midyear’ at March meeting
Participants at the FOMC’s last meeting broadly agreed to continue QE at existing pace ‘through midyear’ but failed to reach a consensus on when to slow asset purchases
BoJ minutes reveal tensions over asset purchase programme
Minutes of final meeting under governor Masaaki Shirakawa show disagreement over whether to loosen policy further, including changes to quantitative easing
Lagarde fears ‘unintended consequences’ of monetary easing
IMF managing director fears side effects from low interest rates and asset purchases; says there is a limit to the share of the burden of recovery that monetary policy can take
Chilean paper finds central bank’s forecasts influence private sector expectations
Working paper finds evidence the private sector updates inflation expectations based on the Central Bank of Chile’s forecasts; suggests more central banks should publish forecasts to aid policy
Assistant governor says RBNZ should not be target of exchange rate ‘angst’
John McDermott deflects criticism that the central bank is failing to correct the exchange rate, warning hard-won inflation credibility could be lost and other factors are at play
Fed ‘stimulus’ chokes indirect finance to SMEs
Low interest rates in the US are crowding out indirect finance to SMEs and distorting financial markets generally. The Fed needs to act by raising rates to 2%, argues Ronald McKinnon
Osborne defends new Bank of England remit
George Osborne defends changes to Bank of England’s remit; UK economists say the finance minister has shifted the burden for stimulating growth on to the central bank
ECB paper finds initial response to financial crisis was not good enough
Working paper suggests policy up to end of 2011 was insufficient to reduce credit availability problems for small businesses, underlining the importance of more recent innovations
Central Bank of Egypt hikes rates as reserves dwindle and inflation rises
Monetary Policy Committee agrees 50 basis point rise despite ‘feeble’ growth, as inflation shows highest rise since 2010 and reserves fall to critical levels
CNB paper formulates optimal policy for transition to euro
Working paper examines how Czech monetary policy should respond to uncertainty during the transition to the euro; finds exchange rate should be stabilised if transition is likely to be long
Former BoE deputy backs dual mandate for UK central bank
Former Bank of England deputy governor says central bank remit changes in UK budget yesterday were ‘disappointing’; advocates switch to a dual mandate targeting growth and inflation
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