Central Banks
National Bank of Denmark warns banks on stress test results
Some systemic banks came close to breaching threshold requirements in latest round of stress tests, central bank says
Cash industry should tweak models in new environment, says BoE’s Cleland
Chief cashier says players should be prepared to “flex” models to adapt to environment where cash reliance is less significant; technology is not a threat, it’s an opportunity, says Cleland
Co-operation matters for macro-prudential impact – BIS paper
Gains from co-operation can be large but asymmetric benefits could create political economy problems, authors say
ECB gives mixed reception to new macro-pru measures
Austrian proposals welcomed, but ECB raises concerns over Belgian draft law
Kazakh central bank to roll out blockchain-based savings
Central bank plans to allow members of the public to trade its short-term notes on a blockchain-based system by the end of the year
US Treasury proposals seek to water down Basel III
Proposals include axing parts of liquidity rules, reducing the use of stress testing and the possibility of allowing banks to opt out of the Volcker rule
People: Haldane keeps his MPC seat; new FSB chairs appointed
BoE’s chief economist Haldane keeps his MPC seat for another term; new FSB chairs picked as Norman Chan and European deputies step down; and more
Income is an important factor for housing demand in Turkey – paper
Profitability of housing investment in Turkey fell in 2003–14; Ceritoğlu suggests drop in home ownership is down to relative price changes
ECB paper calls for EU-wide bond-issuing agency
Authors propose the ECB and a bond issuer should work together to stimulate eurozone
ECB provides detail on stress-testing methods
Top-down approach helped supervisors challenge banks’ results, ECB says
Term premiums matter for inflation – BoJ paper
Term premiums domestically and abroad appear to affect inflation via the exchange rate channel, authors find
IMF economist builds agent-based banking system model
Model captures the diversity of agents and the use of rules of thumb; the author says the modular nature allows “straightforward” enhancements
Wheeler hits out at commercial bank for unforgiving commentary
RBNZ governor says commentary threatens its integrity, damaging the central bank and financial markets; former RBNZ official says Wheeler overreacting
Paper explores effects of capital controls on cost of international debt
Restrictions on capital inflows produce “substantial” corporate bond spreads but effects are mitigated for firms in EU or with English legal origins
Sarb monetary policy committee does not suffer from ‘groupthink’ – Kganyago
Sarb governor says there are often disagreements when it comes to policy decisions; central banks have now become “masters of communication”
Yellen told inflation target needs revising
Economists say current economic conditions call for a revision in the inflation target; Federal Reserve should appoint commission to advise on “path forward”
The ECB must reform Target2 to make it sustainable
Target2 has emerged as the eurozone’s financing entity for ballooning structural balance-of-payments gaps. The present system is unsustainable and needs reform, says Philip Turner