Zero lower bound
The predicament of bloated central bank balance sheets
Swollen balance sheets carry significant risks for combating inflation, ensuring financial stability and preserving central bank credibility, independence and effectiveness. How can central banks reduce them?
When £1 is not £1
Gabriel Stein examines the risks from introducing a CBDC should its value diverge from that of physical currency and bank deposits
Forward guidance loses power when rates rise, RBI research finds
Tool is useful at lower bound but is much less effective during normal conditions, paper argues
Hank model reveals monetary non-neutrality
Inequality and zero lower bound suggest monetary policy can impact long-term real rates
People: First governor of Congo central bank dies aged 92
Deputy governors depart in Canada and Sweden; and more
BoT’s Sethaput on inflation dynamics, central bank mandates and multi-lateral payments
Thai governor speaks about higher inflation, sustainable finance challenges, CBDC experiments and payments governance
‘Unconventional credit policy’ can help avoid lower bound – BIS paper
Liquidity injections can be useful tools but also face limits, authors find
Swedish central bank announces end to net asset purchases
Sveriges Riksbank forecasts it will not raise rates until 2024, saying inflation rise is temporary
Fed reverse repo demand tops $1 trillion
New York Fed facility sets latest in series of record volumes
BIS paper warns against ‘timid’ QE and ‘debt-averse’ fiscal policy
Policy mistakes at zero lower bound can worsen economic problems, authors say
BoE paper builds GDP-at-risk model
Authors generate “fat-tailed” distribution to explore economy’s tendency to hit lower bound on rates
NY Fed’s reserve repo facility marks new record
Banks and funds park almost $1 trillion with New York Fed accounts paying 0.05%
Demand for Fed’s reverse repo hits new record
FOMC increases interest rates on RRP deposits by 5bp, spurring new demand
New York Fed announces record use of reverse repo facility
Value of transactions exceeds December peak and number of counterparties nearly doubles
BoE paper explores liquidity traps with ‘Hank’ model
Precautionary savings can send economy into deflationary spiral, authors find
Lifetime achievement: Charles Goodhart
LSE and BoE veteran has influenced central banking policy practices and frameworks all around the world
Eurozone needs fiscal stimulus – ECB’s Schnabel
ECB board member says raising eurozone inflation needs fiscal evolution and structural reform
New Zealand’s banking system operationally ready for negative rates
Central bank will lower rates below zero lower bound if required, MPC says
Adding QE can fix New Keynesian models – BoE paper
“Mild adjustments” to balance sheet are enough to avoid paradoxical results, authors find
BoE’s Saunders mulls dual interest rates for UK
Funding banks at less than the policy rate could be a useful tool, MPC member says
Otmar Issing on the art of central bank communications
EMU architect critiques “whatever it takes”, forward guidance, Fed’s AIT and ECB’s strategy review
Book notes: The great demographic reversal, by Charles Goodhart and Manoj Pradhan
An important book, predicting that powerful demographic forces will upend conventional thinking
BoE paper offers solution to ‘paradox of flexibility’
Using shadow rate can avoid anomalous results at zero lower bound, authors say
Carbon tax could help monetary policy – ECB paper
But tax will only improve welfare if alternatives to carbon-based power are available, say researchers