Central Banks
Sri Lankan central bank reveals inflation spike in 2012
Sri Lankan annual report says economic growth, while still strong, fell in 2012 while inflation rose sharply; central bank increased reserves by 15%
FDIC vice-chair says Basel III capital requirements provide illusion of safety
Thomas Hoenig says capital ratios allow banks to leverage up while outwardly appearing safe; warns systemically important banks have much worse leverage ratios than smaller institutions
IMF says independent central banks have ‘muzzled’ the inflation threat
World Economic Outlook says central banks have little reason to fear inflation resulting from loose policy – so long as their independence is upheld
FOMC members saw QE continuing ‘through midyear’ at March meeting
Participants at the FOMC’s last meeting broadly agreed to continue QE at existing pace ‘through midyear’ but failed to reach a consensus on when to slow asset purchases
Emirates central bank to introduce direct debit system
Central Bank of UAE to bring in direct debit system to allow payment in instalments without the need for post-dated cheques
Norwegian authorities chase benchmark rate reform
Financial Supervisory Authority of Norway proposes new framework for Norwegian Interbank Offered Rate-setting process; central bank looks to push envelope further
Bernanke says Fed stress tests were a ‘critical turning point’ in crisis
Fed chair says stress tests offer macro-prudential dimension to supervision; US banks have more tier 1 common equity under a severe stress scenario than they did in reality in 2008
Polish paper scrutinises interest rate holds
Research finds that central banks keep interest rates unchanged on majority of occasions; proposes model that distinguishes between rate-holds in period of tightening, easing and neutrality
Thatcher's stance on the ECB deserves re-appraisal
Former UK prime minister Margaret Thatcher feared an independent ECB ‘accountable to no one, least of all national parliaments'. Her concerns seem even more relevant today
Sarb’s head of financial stability fears new powers may cause conflict
Hendrik Nel says the Reserve Bank was not given much choice but to accept new supervisory powers; warns of conflict with monetary policy and possible threat to independence
Ireland’s financial regulator quits central bank
Deputy governor for financial regulation announces departure to ‘pursue other interests’; term spanned turbulent period for Ireland’s economy
New model prescribes strongly counter-cyclical medicine for financial shocks
Working paper from the Bank of Canada suggests counter-cyclical bank capital rules can help steady the ship in the wake of financial shocks, in tandem with monetary policy measures
BoJ minutes reveal tensions over asset purchase programme
Minutes of final meeting under governor Masaaki Shirakawa show disagreement over whether to loosen policy further, including changes to quantitative easing
Cyprus deputy sacked after two months
President revokes contract of central bank’s first ever deputy governor, whose ethnic Greek heritage made his appointment unconstitutional
ECB paper examines shifts in fiscal regimes
Study finds responsibility for stabilising debt levels has swung between monetary and fiscal authorities in UK, Germany and Italy; most clearly defined in UK
FSB to assess efforts to end ‘mechanistic reliance’ on credit ratings
Peer reviews aim to hasten a move away from rating agencies, with countries expected to eliminate references to credit ratings from laws and encourage better internal credit risk assessments
Hungarian deputy governor resigns over new central bank regime
Last remaining deputy from the previous regime cites lack of professional debate and 'Potemkin' approach to stimulating growth
Accumulating reserves to guard against inflation is 'misplaced'
Researchers at Bofit institute find that using reserves as a ‘bulwark against goods price inflation' is a mistake; say best protection against costly reserves accumulation is flexible exchange rate
Lagarde fears ‘unintended consequences’ of monetary easing
IMF managing director fears side effects from low interest rates and asset purchases; says there is a limit to the share of the burden of recovery that monetary policy can take
Payment pricing preventing electronic migration in Ireland
Article in central bank’s quarterly bulletin finds Ireland could save €1 billion by switching from cheques to a more efficient payment instrument
Chilean paper finds room to reduce risk by diversifying investment in Brics
Statistical analysis finds little co-integration of stock market vectors in Latin America and the Bric countries; says this gives investors a good opportunity to diversify, which would reduce risk
Reserve managers expanding into riskier assets, survey finds
Latest Reserve Management Trends reveal central banks are moving into ‘non-traditional' currencies; growing number of reserve managers investing, or considering investing, in equities