Central Banks
FOMC mulls ‘predictable’ balance sheet wind-down
One FOMC member says a “minimum pace” should be set for the reduction in mortgage-backed securities; committee will inform the public about its future plans for the balance sheet when the time comes
Book notes: Architects of the Euro, edited by Kenneth Dyson and Ivo Maes
This biographical study of the 10 key players in the development of the Economic and Monetary Union provides a contrast to more historical analyses
Czech National Bank abandons koruna floor
The central bank is likely to be happy with the market’s reaction, analyst says
Draghi and Praet say ECB will continue with QE
Praet says interest rates should remain low “past the horizon of our net asset purchases”
RBNZ paper develops ‘intuitive and reliable’ output gap measure
Authors turn to a “Beveridge-Nelson filter” to produce an output gap estimate that performs better than those produced by other filtering techniques
BoE proposes ‘amended’ sharia-compliant fund
UK central bank could launch a fund as soon as 2018, the consultation paper says; the facility would be off balance sheet in the form of a special purpose vehicle
RBI makes fresh amendments to liquidity framework
Central bank continues reforms begun under Raghuram Rajan and asks government for new tools; markets still face “liquidity overhang” from demonetisation
Norges Bank’s Nicolaisen: covered bonds can create distortions
Covered bonds are widely seen as a safe asset, but they face risks and could have unintended consequences for markets
RBA opens new ‘highly secure’ banknote vault
Australian central bank makes first investment in banknote storage and distribution in over a decade; Lowe says public have come to “rely” on “secure and high-quality” banknotes
BIS report: build liquidity co‑operation early to prepare for crisis
CGFS report urges central banks to build networks domestically and across borders to have liquidity ready for the next crisis
Sarb deputy says political uncertainty will affect policy normalisation
Mminele asks whether central banks will enforce notion of economic slack as forward guidance reaches limits; political uncertainty rocking the policy landscape
BoE’s Vlieghe: good policy is more than accurate forecasting
MPC member says doctors cannot forecast heart attacks, but are still pretty useful before and after the event
‘Ambitious’ capital markets union necessary – Constâncio
Better eurozone capital markets would smooth regional shocks, ECB vice-president says
Tarullo admits Volcker rule may be ‘too complicated’
Outgoing Fed governor says Volcker rule probably needs adjustment, though he warns against any measures that would weaken the capital regime
EBA provides guidance on bail-ins under European directive
Guidelines cover shareholders, debt-equity conversions and “grandfathered” assets
Mexican deputy: EMs should broaden trade strategy in wake of uncertainty
He takes note of uncertain political environment and what impact it could have on trade for emerging markets; exploring trade of services could be one option
Fed’s Jeffrey Lacker quits over information leak
Richmond Fed president resigns after admitting he leaked information from the September 2012 FOMC meeting; Lacker failed to report indiscretion on three occasions
Irish governor says bank is taking tough action on loan malpractice
Total of €78 million paid so far in compensation, Lane says
Fed paper searches for optimal bank capital
Study weighs higher cost of equity against the reduction in costly financial crises implied by higher capital, estimating an optimal figure
Senior central bank officials defend globalisation
Dombret and Mminele argue against the idea that globalisation is causing high unemployment and low growth, while stressing the negative impacts of protectionist trade policies
IMF praises Ukrainian central bank while disbursing $1 billion
IMF deputy managing director calls for continued support for central bank’s reforms
Debelle sets timeframe for adoption of forex global code
Market participants will have six to 12 months to adjust practices once the code is published on May 25
RBI’s Patel gets pay rise but remains cheap by G20 standards
RBI governor sees his pay increase somewhat relative to his predecessor, but other G20 governors and even other RBI staff earn substantially more