Recession
US banks should prepare for uneven recovery – Patrick Harker
Banks “shouldn’t be issuing large dividends at the moment”, Philadelphia Fed chief says
Fed set to adopt ‘elements’ of price-level targeting
Covid-19 could act as a catalyst for a Janet Yellen-supported Fed move to adopt elements of price-level targeting. But questions remain about the timing of such a move
BoE predicts sharp fall and fast recovery for UK
Forecasters predict limited long-term scarring from virus shock; banks are in strong position to lend, stress test finds
Carbon tax spike could spur global recession – S&P
Higher carbon prices would trigger widespread industry defaults, says agency research unit
Can growth in developing Asia be made more sustainable?
The structure of the global economy will be reshaped by Covid-19, and what happens in Asia will be crucial, writes Philip Turner
US default rates could hit 8.1% without policy action – Richmond Fed
Loan forbearance policies could see this drop to “essentially zero” in 2021, researchers say
Pandemics can depress natural rates for multiple decades – SF Fed
Real wages tend to rise gradually for 30 years after pandemics, data stretching back to 1340s shows
Mass testing ‘would end crisis’ – Bullard
Government should foot bill for Covid-19 test production, Bullard says
Canadian governor sees ‘robust’ recovery in third quarter
Poloz says major shock to growth will probably be followed by “swift” recovery
Bank of Canada unveils new purchasing programmes
Monetary policy report analysis shows economy could shrink by roughly 30% in Q2
IMF projects deepest recession since Great Depression
Global growth could contract by between -3% and -6% this year, a combined loss of output of $9 trillion for 2020 and 2021
El-Erian on Covid-19 policy risks, ‘zombie’ markets and central bank capture
Former Pimco chief says Fed move into high yield is a step too far, new rules needed on leverage and false liquidity, and narrow window emerges for central banks to shed some of their policy load
US jobless claims eclipse previous week’s record high
Economy will require more fiscal support, say current and former senior government officials
Failure to curb ‘binge borrowing’ could worsen downturn – Yellen
“Excessively” high corporate borrowing may trigger a “wave of corporate defaults” in the coming months, former Fed chair warns
East Asian economies face ‘profound’ impact from Covid-19 – World Bank
Report estimates growth could turn negative for the region in “lower-case” scenario
16% of US jobs in high-risk sectors – Brookings research
Researchers examine possible impact of coronavirus on US sectors and metropolitan areas
US economy could face largest quarterly contraction in history – Bullard
$2.5 trillion in national income might be wiped out, St Louis Fed president says; Congressional leaders agree $2 trillion stimulus package
Canadian governor says central bank can buy corporate bonds outright
Poloz’s statement could mean Bank of Canada is considering QE, observers say
Book notes: Renewing our monetary vows, by Richard Barwell and Jagjit Chadha
Open letters to the governor of the Bank of England, as new chief Andrew Bailey takes over
The Tokyo Olympics: downside risks prevail
The Bank of Japan’s latest stimulus effort seems to be weak, and comes at a time when the benefits of hosting the Tokyo Olympics may be overstated – even if the games still take place
Do low rates spur investment?
Many believe low interest rates spur investment, but there appears to be little hard evidence to support such claims, writes former IMF head Jacques de Larosière
Why Bulgaria needs to deepen its currency board
The BNB’s currency board rules should be extended to transaction deposits at commercial banks, which could in turn issue digital currencies, even in the event of euro adoption
Stability versus solvency
There is still far too much regulatory forbearance on troubled bank debt. More on-site inspections and genuine writedowns are needed to fix the banking system
Credit-fuelled construction booms lead to busts – IMF research
Credit booms that lead to rapid growth in construction more likely to end in crisis, researchers find