Economics
Policymakers need wider range of systemic risk models – paper
Researchers attempt to combine systemic importance and systemic risk approaches
BoE paper lays out ‘financial conditions index’ for UK
Index proves valuable as a summary measure and also as an input to forecasting
Paper: foreign fund inflows raised US pre-crisis risk-taking
The Bank of Italy paper correlates data on foreign inflows with four indicators of risk
FCA mulls use of AI to tackle money laundering
Crime unit head says the financial regulator views machine learning as a complement to human judgement, not a replacement
BoE seeks to enhance stress-test model oversight
Prudential Regulatory Authority to enforce new stress-test model principles in 2018; smaller banks asked to tailor them to their operations
Diversified export markets may offset Mexican Nafta showdown
Bank of Mexico sees a failure to renegotiate the trade deal as the biggest risk to the economy
Income convergence in eurozone faltered before euro, research finds
Strong financial cycle concealed lack of productivity growth since 1990s in Spain and Italy, implying euro may not be to blame
Constancio praises Reis’s studies of monetary policy
Work helped to open “new chapter in research on expectation formulation”
Haldane outlines ‘interdisciplinary’ economics model
Andy Haldane and Arthur Turrell describe a way of broadening the scope of economics’ limited array of core models
Globally active banks have made 'major changes' to funding mix – Spanish paper
Banks used funding from cross-border subsidiaries more after 2007, researchers say
Bank of Mexico cuts growth forecasts for 2017 due to earthquakes
Renegotiation of Nafta is main downside risk for economy, outgoing governor Carstens says
More work needed on supply channel of finance – BIS paper
Demand-side links between the financial and real sectors are better understood, say authors
NY Fed economists reveal big-data approach to nowcasting
Paper sets out the New York Fed’s model for producing early estimates of major indicators
Eurozone excess liquidity focused on five states – ECB paper
Funding stress no longer drives the concentration of holdings, say researchers
Low productivity might not be weighing on real rates – research
Long-run correlations imply there is little reason to believe low productivity is associated with low rates, Cleveland Fed economist finds
Venezuelan crisis deepens; rating agencies declare default
Russia agrees to restructure $3.15 billion to facilitate repayments to creditors
Central banks should combine monetary rules to achieve objectives – research
Estimates based on different models should be updated regularly, authors say
Austrian paper takes detailed look at regulatory integration within EU
Researcher uses “bilateral nature” of EU reforms to help gauge effects
Big data in central banks focus report 2017
The second Central Banking Journal focus report on big data expands on the original study from 2016, assessing how challenges have evolved in the past year.
The rapid evolution of data
As big data enters the mainstream, it is critical to understand how it can transform our thinking, but also to be realistic about its shortcomings and biases
BIS paper studies how weak banks beget zombie firms
Weak banks have a tendency to misallocate capital, authors find, though the effect is only important in the long run, in contrast to earlier studies
NY Fed paper estimates US contagion risks
Authors design a network model incorporating non-banks to estimate how the risk of a “default cascade” has changed over time
AI adoption lag could explain productivity shortfall – research
Erik Brynjolfsson, Daniel Rock and Chad Syverson argue the productivity slowdown is not as surprising as it may seem, and there are reasons to be hopeful
Korea suffering from ‘missing inflation’ – deputy governor
Core inflation is still in the mid-1% range despite economic improvement