Central Banks
BoE asks public to nominate artist for next £20 note
Mark Carney says next individual on £20 note will be a visual artist, and asks members of the public to nominate people from the field; committee will then draw up a shortlist
Minneapolis Fed essay suggests new focus for FOMC comms
Sam Schulhofer-Wohl argues the FOMC should talk more about what it is trying to accomplish with its monetary policy; Minneapolis Fed staff rewrite January statement to illustrate point
Repo market coping with liquidity regulations for now, panellists say
Participants at Euroclear’s Collateral Conference say repo markets have delivered new efficiency gains to keep collateral supply up, but the outlook over the coming year looks less certain
RBA’s Lowe wary of structural adjustment in global interest rates
Australian deputy governor expects rates on offer to savers to pick up when confidence grows and businesses compete for funds again, but sees potential for structural shift as well
Fed’s Powell supports relief for community banks facing compliance burdens
Governor Jerome Powell supports setting asset threshold of around $10 billion for both the Volcker rule and incentive compensation rules
Zeti deems shadow loan regulation ‘highly effective'
Bank Negara Malaysia governor says macro-prudential regulation of non-banks has stabilised the overheated property market, but IMF warns of risks lurking in the shadows
Mexican deputy cautious of data-dependent Fed policy
Manuel Sánchez sees potential for smooth tightening if markets are able to price in rate changes, but remains alert to risk Fed is pushed into acting faster than planned
Evans: Fed must keep rates low to protect target symmetry
Chicago Fed president sees no serious costs with ‘modestly overshooting’ 2%, but is concerned about potential damage to inflation expectations of tightening too soon
ECB’s Mersch warns against blindly pinning hopes on macro-prudential policy
Yves Mersch says there is much to learn about how tools work; sees potential for ‘conflicts of competence’ between micro- and macro-prudential authorities
Esma official slams CFTC margin rules
US rules driven by competitive rather than prudential concerns, Fabrizio Planta charges
In search of a better measure of inflation
Hedonic adjustments offer a way of tackling bias in the CPI, albeit at a cost, but new research suggests even these may be misrepresenting inflation – with broad implications for the economy
High liquidity creation increases probability of bank failure, IMF paper warns
Working paper published by the IMF says regulators can reduce costs of bank failure by identifying high liquidity creators early and monitoring them closely
BoE outlines capital markets union proposals
Central bank sets out policy recommendations designed to deliver better functioning capital markets in Europe; argues institutional change, such as greater centralisation, is not necessary
IMF urges Irish authorities to ‘enhance’ central bank independence
Report warns legal framework could ‘potentially introduce political considerations’ into governance arrangements; finds uncompetitive pay may be hurting ability to hire and retain supervisors
Kuroda reviews QQE two years on
Bank of Japan governor says policy is working as intended, and even though inflation has fallen to zero, prices should soon ‘accelerate toward’ the 2% target
Bank of Canada plans changes to operating framework
Changes would see Canadian central bank cut back on purchase of government bonds through primary market, while intervening less frequently in overnight market
Household expectations help flesh out inflation picture, research finds
Research published in the latest Bank of Canada review argues that looking at the behaviour of expectations since the crisis helps in understanding evolution of inflation
Mario Draghi sees large toolkit as ‘standard’ in 2020
ECB president tells Olivier Blanchard the central bank will retain a broad set of monetary instruments in five years’ time; insists QE will not be tapered early
Czech vice-governor questions case for joining banking union
Mojmír Hampl considers the pros and cons of the Czech Republic joining the SSM; government adopts a ‘wait-and-see approach’ and will review the issue every 12 months
Kazakhstan proposes sweeping changes to monetary policy framework
Central bank plans root-and-branch reform of its monetary policy with move to inflation targeting to be accompanied by revamped governance, communications, economic modelling and more
RBA paper unpacks central bank’s DSGE model
Authors shed light on adapted DSGE model used in Australia, emphasising its deliberate simplicity so additional features can be bolted on as needed
Blanchard to step down as IMF chief economist
Olivier Blanchard will leave in September and join Peterson Institute as senior fellow; Lagarde praises him for ‘spurring a fundamental rethinking of macroeconomic policy’