Central Banks
Bank of Ghana starts to unwind tight monetary policy
Central bank slashes interest rates to 23.5% in largest cut since 2010; inflation shows signs of improvement but certain risks still loom over prices
Iran central bank slams latest asset freeze ruling
Luxembourg court freezes $1.6 billion of central bank assets amid terrorism compensation case; legal battle may have implications for Iran’s nuclear deal
Bank of Russia cuts policy rate
Elvira Nabiullina says Russia on course to hit 4% inflation target by year end
Bank and capital market financing not created equal – BIS paper
Substituting bank loans for non-bank finance after a shock appears to have a negative impact on the economy, authors find
SNB annual report sheds light on equity investing strategy
Central bank details approach to investing around 20% of its foreign exchange reserves in equities, including diversification, activism and avoidance of political considerations
Bank of England launches first ‘exploratory’ stress test
BoE will assess banks’ longer-term resilience to periods of stagnation; cyclical test made tougher
BoE’s FPC sounds warning on implementation of global standards
FPC cautions on global co-operation around regulatory standards; follows plans for deregulation in the US and tit-for-tat threat from German regulators
Kenya’s Imperial Bank given 90-day lifeline
High court extends commercial bank’s receivership to allow shareholders and receiver to reach agreement; Kenya’s central bank takes first step toward removing licensing moratorium
Extended monetary easing in US has larger impact abroad – paper
IMF paper examines the impact of periods of prolonged monetary easing on risk-taking behaviour; leverage ratio and other measures of vulnerability increase
Croatian governor warns of further financial crises
It is probably time for central banks to “get out” of expanded balance sheets, Boris Vujčić says
Commodity prices impact the probability of project completion in Peru – paper
BIS paper examines how a drop in oil prices affects the timing and completion of investment projects; results show mining sector in Peru is particularly sensitive
Schembri: mix of factors holding back Canadian investment
The outlook is improving, the deputy governor says; openness to trade and immigration are likely to boost growth
Book notes: Competition and Stability in Banking, by Xavier Vives
Xavier Vives has written a fascinating book that highlights many important issues in banking regulation. But there are some flaws in his argument
BoE paper: ‘imperfect common knowledge’ implies Taylor principle need not hold
It is not strictly necessary for a central bank to respond to temporary deviations of the economy from trend, paper finds; result challenges findings such as ‘Neo Fisherism’
Bank of Canada’s C$460m refurbishment on time and on budget – Poloz
Construction workers have spent past three years gutting old head office and renewing interior to meet modern standards; annual report sheds light on costs
SEC nominee flip-flops on Dodd-Frank rollback
Rules mandated by statute must be adopted by regulators, Clayton concedes
Women on policy boards support prudent decision-making – research
Paper examines the impact of women on monetary policy decision making; authors’ results reveal the presence of women tends to lead to more “hawkish” decisions
Finnish paper presents two explanations for eurozone weakness
Paper looks at fall in natural interest rate and output rate shocks
CEPR report ‘cautiously optimistic’ on bail-in
Thomas Philippon and Aude Salord find range of issues with European bail-in rules, but say they can probably be fixed; Cyprus bail-in “terribly” executed but still worked
EC consults on twin peaks model for supervisory authorities
Document asks stakeholders for suggestions on funding and governance reform
Exporters’ ‘sweet spot’ unlikely to be enjoyed for long, says BoE’s Broadbent
BoE deputy investigates cause of sterling’s Brexit depreciation, examining potential impact of market speculation
London financial sector likely to ‘lose prominence’ following Brexit, says Sarb bulletin
South Africa to watch developments in London closely following Brexit vote, as domestic banks decrease exposures to the UK
Build-up of public debt causes longer recessions for EMs – paper
“Less supportive” fiscal policy makes emerging markets more prone to problems associated with accumulation of public debt; authors highlight the importance of fiscal buffers
Positive shock could still trip up advanced economies – Blanchard
Former IMF chief economist warns high debt levels could interact with positive shocks to cause problems; backs Rogoff’s plan for a cashless society