Central Banks
Ireland to move to euro rounding next week
Shoppers in Ireland will have transactions rounded to nearest five cents, Central Bank of Ireland says; scheme to be voluntary and apply only to cash payments
Eurozone monetary policy works through credit channel, paper argues
Strong evidence eurozone monetary policy works through the credit channel rather than the interest rate channel, paper says; unconventional monetary policy strongest in crisis
No clear evidence for always using trend inflation in models, paper says
Adding positive steady-state inflation to new Keynesian DSGE models improves analysis of high-inflation periods but otherwise does not significantly alter results, paper argues
Eichengreen says central banks lack will not ability to tackle deflation
Central banks have the tools to deal with bad deflation if they are willing to act aggressively enough, economist argues; broadening asset purchases or helicopter money are both options
Ireland’s Gerlach points to indirect impact of macro-prudential tools
Deputy governor says evidence suggests LTV and LTI tools are having the strongest effect via indirect channels, rather than their direct impact on credit, although the tools are still new
Sovereign debt holdings ‘significant’ driver of insurer risk, Bundesbank paper says
Insurance companies at risk from holdings of sovereign debt, and current regulation does not adequately deal with problem, paper argues
Outlook for emerging markets not as ‘gloomy’ as people think, BoE’s Forbes says
Bank of England MPC member Kristin Forbes warns pessimism may be ‘overshadowing important differences across countries’ and strengths in some economies
Further rate hikes likely as Chile raises 25bp
Central bank lifts rate to 3.25% in first move in four years; analysts suggest the move is an effort to rein in expectations
EU must ‘contain divergence’ between member states, says Polish central bank head
Marek Belka says reforms will not be supported unless European Union prevents economic divergence; speakers say quality of structural reform debate must improve
MAS's Menon hails local alternative to cash
MAS director says Singapore's electronic transfer system potentially 'safer and cheaper' than notes and coins; wants people to be able to make payments using social networks
John Taylor and William Dudley clash on Fed strategy
Stanford professor John Taylor questions Fed’s communications; New York Fed president William Dudley sets out case against following more rules-based policy
More polymer banknotes in new Nicaraguan series
Nicaragua to use polymer substrate on two additional denominations in new series launched later this month; revamp costing over $17 million
Central banks starting to unlock potential in big data
Some central banks are making tentative inroads into the study of big data, and many more want to, a study by the BIS’s Irving Fisher Committee finds
Iosco, Asifma officials urge early global co-operation on future rules
Joining forces early on would improve regulatory cohesion between countries, but post-crisis pressure on national rule-makers to legislate poses problems, it is suggested at Hong Kong conference
ECB paper explores fiscal adjustment in stressed countries
Fiscal corrections have been ‘more costly’ in contractionary times in Greece, Ireland, Portugal and Spain over the past 50 years, paper suggests
Jamaican governor defends update of central bank act
Amendments would give central bank new responsibility for financial system stability; Brian Wynter argues it is not designed to turn the institution into a ‘super-regulator’
Heterogeneous beliefs may weaken effect of forward guidance, paper argues
Fixed-date and state-contingent guidance by the Federal Reserve led some market expectations to converge, but heterogeneous beliefs about inflation and consumption persisted
BoE unveils final plans for ring-fencing banks
Consultation sets out how bank holding companies should structure themselves to comply with legislation on ring-fencing, but a decision on extra capital buffers is yet to come