Balance sheet
Central banking enters a new era
Central banks face a delicate balancing act to preserve their reputations as they evolve into ‘buyers of last resort’ and some of their actions appear functionally equivalent to ‘monetary financing’
ECB’s Enria unsure banks will dip into capital buffers
Anxiety over investor and rating agency reaction may limit banks’ use of Covid relief measures
Book notes: Central banking before 1800, by Ulrich Bindseil
A new standard reference point for the history of central banking
Economists debate monetary financing of China’s government debt
PBoC adviser dismisses idea of monetising government bonds despite calls from Ministry of Finance think-tank
Fed predicts ‘unprecedented’ economic shock
Policy on hold as Q2 may see data “worse than any data we have seen”, Powell warns
Fed’s balance sheet increases by 50% since March
Total assets now just shy of $6.4 trillion, a new record high
BoE and ECB weigh calls to follow US lead on capital relief
European regulators face pressure to exempt sovereign exposures from the leverage ratio
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
Beware of capital: much ado about nothing?
Capital increases can be offset by asset valuation, provision and income recognition forbearance
Bank of England to lend directly to government
Central bank agrees temporary expansion of “Ways and Means” facility
Central banks may have to become ‘dealers of last resort’ – BIS economists
EMEs have not overcome “original sin” by deepening local currency bond markets, authors warn
Should the Fed be next to implement yield curve control?
The Reserve Bank of Australia is now the second G20 central bank trying to control longer-term interest rates. Could the Fed be next?
Accounting for losses during a pandemic
US banks get green light from senators to use loan loss accounting methods widely criticised following 2008 crisis
Fed’s balance sheet could see massive further growth
Response to coronavirus has already pushed Fed’s holdings up to record levels
Banks rush to tap new dollar liquidity facilities
IIF warns of major capital flight from emerging markets as demand for Fed-backed repos surges
Fed unveils new capital regime to criticism from Brainard
Federal Reserve says new rules will maintain capital levels, but senior official calls them “imprudent”
Did the Riksbank abandon negative rates too soon?
In January, a key inflation measure dropped sharply. Policy-makers face difficult choices if inflation does not recover
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
Fed could postpone stress buffer beyond CCAR – experts
Delays prompt speculation that the new rules will only be known after the stress-test results in June
Bulgaria: long live the currency board
Bulgaria should reject the euro and extend its currency board to cover bank deposits
Fed’s Quarles warns big balance sheet could harm credibility
Fed official proposes tweaks to discount window and G-Sib surcharges to improve monetary framework
Basel III changed securities dealing – Bank of Canada paper
Regulations have changed dealers’ behaviour and reduced risk, study finds
Fed’s repo tapering plans hit snag
Banks demand double what was on offer at Fed’s first reduced repo offering