Central Banks
Rajan urges central banks to consider spillovers
Reserve Bank of India governor wants central banks to consider the impact of their monetary policies on cross-border capital flows; questions the efficacy of QE, forward guidance and IMF advice
High debt, low growth conundrum gets IMF staff treatment
Paper says countries aiming to deleverage should keep monetary policy loose, but warns of attempts to tackle it through inflation; says conditions for fiscal consolidation have changed post-crisis
Higher interest rates no ‘immediate threat' to UK banks, says FPC
Financial Policy Committee still warns firms are not taking sufficient account of potential stresses and that borrowers would be exposed to higher interest rates were debt levels to rise further
HKMA’s Yue focuses on renminbi as China liberalises capital markets
Deputy chief executive Eddie Yue believes the renminbi will be ‘crucial’ in managing impact of China’s capital account liberalisation on global markets; hosts forum with UK government official
Canadian deputy champions FSB
FSB may be small but is capable of ‘nimbly’ co-ordinating global reforms efforts in a way that other international organisations are not, says Lawrence Schembri
Crisis prompted both ‘re-discovery' and overhaul of CBs' emergency liquidity
Walter Bagehot's dictum to lend freely at high interest rates and against good collateral during a financial panic was revived, then altered during the crisis, according to Thomas Baxter of the NY Fed
RBNZ institutional set-up makes forward guidance easier, says Grimes
Former chair of Reserve Bank of New Zealand’s board of directors says the concentration of power in the hands of the central bank’s governor makes forward guidance easier and policy-making clearer
Hong Kong and Australia see risks in low interest rates and Chinese NPLs
Impact of any shift in the yield curve on banks' balance sheets ‘may not be small', according to HKMA; RBA urges lenders to maintain prudent risk appetite as rates remain low
New Riksbank deputy explains reasons behind dissent
In his first public address as a Swedish monetary policy-maker, Martin Flodén says a cut in interest rates will help inflation target to be reached sooner, limiting financial imbalances in the long term
Pianalto confident in case for faster retail payments
Cleveland Fed president Sandra Pianalto says the lack of 'concrete' evidence in favour of a near-real-time payment system should not stand in the way of its creation
Fed paper models monetary and fiscal policy interdependence
Working paper analyses interdependence between monetary and fiscal policy-making, testing policy experiments and finding a ‘non-negligible’ interaction between the two
ECB appoints Oliver Wyman to conduct ‘comprehensive' eurozone bank review
European Central Bank appoints the same consultancy firm as conducted Spain's banking stress tests and is doing the same for Slovenia; more details of the comprehensive review to follow soon
Central banks struggle to publicise new banknotes
Netherlands Bank finds that two-thirds of the Dutch population do not check the authenticity of their banknotes, which adds to the difficulty of communicating changes in their security features
US monetary policy weakened by fees and interest changes, paper finds
Research finds payment of interest on excess reserves and higher fees on uncollateralised overdrafts boosted efficiency but damaged the Federal Reserve’s monetary policy
BoE MPC members scramble to reaffirm low rates
Ben Broadbent, David Miles and Paul Tucker deliver speeches stressing their commitment to forward guidance and assuring markets the committee is ‘not in a rush’ to tighten policy
Dallas Fed’s Fisher criticises FOMC decision
Richard Fisher vociferously opposed keeping asset purchases at $85 billion each month; warned the committee that doing so would damage the Federal Reserve’s credibility
FDIC chair discusses US effort to balance capital and leverage requirements
Martin Gruenberg says Basel III relies too heavily on capital ratios, potentially incentivising big banks to employ ‘imprudent' leverage strategies; discusses regulatory remedies
ECB paper develops macro-pru tool probing impact of sudden capital outflows
Results show limited impact of a liquidity shock on banks' solvency ratios in the short term, but ‘moderate to high' effect on the supply of credit to the broader economy
Politically-aligned governors more likely to 'survive', research finds
Paper unearths evidence that central bank governors with the same political leanings as the government in power last significantly longer in their roles
Buffett’s ‘greatest hedge fund’ claim puts spotlight on the Fed
Warren Buffett's claim the Fed is ‘the greatest hedge fund in history’ fuels bloated balance sheet and politicisation debate; Fed veteran Gary Stern says 'sage of Omaha’s' comments are ‘misguided’
NY Fed trials new reverse repo facility
Federal Reserve Bank of New York tests new overnight reverse repo facility; William Dudley believes it will bolster the Fed’s control over short-term money market rates
Fedwire data can give accurate picture of interbank fed funds market, paper shows
NY Fed researchers find Fedwire-derived data on fed funds borrowing are strongly correlated with the figures subsequently reported by banks