Central Banks
Central bankers from small Caribbean states to get IMF training under new deal
IMF to provide training at Washington headquarters to officials from smaller Caribbean states after Central Bank of Trinidad and Tobago offers financial support
ECB watching oil and euro closely for inflation risks
Deflation has become less likely in the eurozone since the implementation of quantitative easing, but falling oil prices are pressing on inflation expectations, governing council says
BIS paper offers method of overcoming time inconsistency in macro-prudential policies
Macro-prudential policies are necessary to prevent finance amplifying imbalances, but regulators struggle to credibly commit to policies, authors warn
BoE turns attention to risk-free rate as markets push out expectation of hike
MPC mulling the question of whether lower rate expectations will provide enough stimulus to overcome growing risks from emerging markets; rates stay on hold
RBA’s John Simon says low rate a ‘poor predictor’ of crises
Low interest rates of themselves did not cause the global financial crisis and have always been a poor predictor of economic instability, senior Reserve Bank of Australia economist argues
European real effective exchange rates are hugely misaligned, paper argues
Real effective exchange rates for European Union countries do not correspond to national economic fundamentals, a working paper from the Bank of Lithuania argues
Norway dips into oil fund for first time
Stimulus programme and low oil prices combine to push government deficit above oil revenues; NBIM opens regional office in Tokyo
Rajan weighs inclusion challenges as IMF identifies financial stability risks
Reserve Bank of India governor discusses the driving factors behind inclusion and challenges posed to supervisors in IMF panel, following staff note on macroeconomic impacts
China launches cross-border payments platform
Heavily anticipated China International Payment System goes live, with StanChart and ICBC Singapore announcing successful transactions on new platform
Jamaica must sustain reform, central bank governor says
Jamaica must keep economic reform efforts going for another 15 years, Brian Wynter says; calls for enhancements to role of IMF’s centre for Caribbean technical assistance
Central Bank of Iceland delays report as tensions over failed banks rise
Central bank postpones launch of financial stability report at last minute, citing the need to wait for new information; governor responds to lobby group calling for heavier tax on failed banks
Expected delay to non-EU central counterparty approval risks frontloading panic
Lawyers predict many CCPs will remain in limbo by the current December 15 deadline, which overlaps with the start of frontloading and ups the pressure on banks ahead of clearing requirement
Emerging markets appear less susceptible to global contagion than advanced economies – BIS paper
Working paper explores whether central banks can still manage domestic financial conditions despite globalisation; isolates ‘contagion’ component in bond yield dynamics
Bundesbank paper explores why banks may lend too much
A limited number of banks may engage in excessive lending, and those that do are more likely to rely upon capital support, says Bundesbank paper
DNB director targets better measurement of inclusion
Frank Elderson emphasises the benefits of financial inclusion and says central bank will put forward proposals for financial inclusion index later this week
Failed normalisation could hold back growth, IMF warns
Flagship report presents different scenarios based on whether the normalisation of monetary and financial conditions progresses smoothly or not; process could stall if risks crystallise
IMF sees divergent risks in new outlook
IMF revises growth outlook for this year and next, while noting transformation in risks; Maurice Obstfeld discussed emerging market policy in anticipation of Fed hike
ECB publishes principles to avoid market-moving missteps
‘Guiding principles’ for communications by executive board members seek to prevent select groups gaining a commercial advantage from appearances
Increases in securitisation may lead to under-pricing of risk, study argues
Increased asset securitisation reduces premia on bonds and equities, Bank of Spain working paper says; decrease in cost of risk may not be related to an actual fall in risk