Central Banks
RBNZ intervenes in forex and hits bank capital
Central bank boosts mortgage lending capital requirements and sells New Zealand dollars to ‘take the tops off rallies’; economy faces low inflation but strong dollar and overheating housing market
IMF paper examines emerging market counter-cyclical monetary policy
Emerging markets should target inflation for its counter-cyclical benefits as well as output variability, researchers find
European Commissioner defends under-fire Tobin tax
Algirdas Šemeta says the European Commission’s proposal for a financial transactions tax is ‘technically and legally sound’; numerous stakeholders concerned by impact on repo markets
Bank of Estonia scraps new payments system
Plans for new interbank retail payments system are dropped due to a lack of popularity among commercial banks; hunt for a set-up compliant with Sepa requirements continues
ECB’s head of financial stability says SSM is not enough
Ignazio Angeloni says banking union will be ‘decisive’ in restoring stability to the eurozone, but the single supervisory mechanism will not be sufficient on its own
Fed’s Tarullo says wholesale funding is the most important gap in regulation
Fed governor warns regulation does not yet adequately address vulnerabilities in the financial system, citing wholesale funding and ending too-big-to-fail as particular problems
Liikanen adds voice to defenders of central bank independence
Bank of Finland governor calls value of central bank independence a ‘lasting lesson’ of recent decades; cautions that both fiscal and financial dominance represent threats
ECB paper models central bank liquidity provision
Researchers create model to find optimal level of central bank liquidity provision, by determining the most appropriate collateral framework
RBA cuts rates to record low
Central bank seeks to encourage rebalancing of demand as mining investment heads for peak; analysts see further rate cuts on the horizon
Weidmann: Eurosystem has 'stretched its mandate' to contain crisis
Bundesbank president says mismatch of control and liability is diminishing the responsibility of individual states and transferring the consequences of failure onto the European community
ECB’s Cœuré says it is time to think about exit from unconventional policies
Executive board member says time is not yet right to start withdrawing extra liquidity provision, but such policies cannot be kept in place forever
UK’s FCA faces serious challenges in meeting competition objective, survey warns
Industry survey highlights ‘scale of challenge’ for conduct regulator in promoting competition; says many measures taken so far may actually be anti-competitive
RBI cuts interest rate, while eyeing lower inflation
The Reserve Bank of India reduces benchmark interest rate for third time in 2013 to 7%; says there is ‘little space’ for further easing
Bank of Canada names Stephen Poloz as governor
The CEO of Export Development Canada Stephen Poloz is a surprise pick to replace Mark Carney; governor designate backs existing monetary policy framework and says inflation target is ‘sacrosanct’
ECB lifts ban on Cypriot ‘junk' bond eligibility
Rule suspension allows Cypriot government-issued or guaranteed debt instruments to be used as collateral in Eurosystem operations; follows precedent set for Greece in September 2012
Bundesbank paper examines dynamics of crisis repo funding
Discussion paper finds changing pattern of fund management during global financial crisis, as ability of parent banks to protect subsidiaries dwindled; signals importance of strong capital base
ECB paper builds eurozone financial conditions indexes
Researchers confirm financial conditions differed across the eurozone before and after the crisis; gap shrinks when monetary policy variables are included in indexes
Fischer defends Bank of Israel over house prices
Bank of Israel governor tells parliamentary committee the central bank's interest rate cannot serve the interests of the housing market alone
ECB cuts rates and sets up ‘task force' seeking to promote SME lending
European Central Bank cuts benchmark rate from 0.75% to 0.5% by a majority decision; Mario Draghi says has set up a ‘joint task force' with the EIB to examine ways of promoting business lending
BoJ paper creates new framework for identifying monetary policy shocks
Working paper uses TVP-VAR model to identify the impact of conventional and unconventional monetary policy shocks on the real economy at the zero lower bound
Italians back using gold reserves to lower funding costs
A survey commissioned by the World Gold Council finds that Italians would support the creation of gold-backed bonds; sovereign bond yields fall further as new government is formed
BoJ minutes show thinking behind ‘extremely aggressive' easing
Bank of Japan monetary policy committee members were determined to grasp opportunity and make a clear statement to the markets, at meeting that heralded a new era in monetary easing