Central Banks
Rajan overruled external members’ call for rate cut in September
External members on RBI’s technical advisory committee see the case for easing, and the majority voted for a rate cut in September; deputy governor portfolios shaken up
BIS paper finds liquidity regulation need not harm lending
Evidence from the UK implies banks reduced their interconnectedness, but did not cut lending to the real economy in response to tighter liquidity regulations in 2010
Broadbent: Neutral real rates will stay low for ‘some time’
Bank of England deputy governor Ben Broadbent expects neutral real rates of interest to rise ‘eventually’, but expects them to remain low ‘for some time yet’
Paraguay’s central bank president calls for new powers
Carlos Fernández Valdovinos says the national law needs to be updated, in a manner that allows the regulator to adapt quickly in the face of emerging risks
IMF paper sees EU inflation expectations holding firm
Working paper says low core inflation in eurozone has had ‘significant’ impact on the rest of the region, though the main driver of disinflation remains food and energy prices
Bank of Finland paper examines impact of Basel II on international bank lending
Research finds sovereign credit rating revisions have become more important since the implementation of Basel II capital rules
Bailey accuses EBA of comms blunder
BoE deputy says EBA ‘incorrectly transmitted’ the news that its vote on an opinion regarding bonus caps had been unanimous - as he voted against it
Mexican committee makes progress on bank liquidity rules
Bank of Mexico is setting up new rules on banking liquidity that will take effect in January 2015, in line with Basel III requirements; work progressed through new committee
National Bank of Denmark to outsource production of banknotes and coins
The National Bank of Denmark will outsource all of its printing and minting services to an external supplier in 2016, with an estimated saving of $17 million by 2020
EBA finds Bulgarian National Bank ‘in breach’ of EU law
The European Banking Authority issues a recommendation calling for the Bulgarian authorities to allow depositors access to the funds held by failed banks
BoE minutes hint at dovish shift
Committee still split 7-2 in favour of holding rates, but language takes a more dovish tone with housing market and external environment providing cause for concern
People: Mexican deputy gets second term; Paraguay names new director
Mexican president reappoints Legaspi as deputy governor of Bank of Mexico; Central Bank of Paraguay promotes legal unit manager to director; and more
ECB health check ‘putting strains’ on Cyprus central bank
IMF staff report finds the operational capacity of the Central Bank of Cyprus is being stretched by the transition to the SSM, including the ECB's comprehensive assessment
Angolan central bank looks to boost BESA capital by $4.3 billion
National bank of Angola sets out plans to recapitalise BESA; Novo Banco will get a 9.9% stake in the bank and receive $850 million over ten years in restructuring deal
Failure to improve culture will be punished, say Dudley and Tarullo
Fed officials say banks that fail to improve culture will face regulatory sanctions, including the possibility of being ‘dramatically downsized and simplified’
Dollar and renminbi can coexist as global currencies, Eichengreen says
Bank of Korea paper finds that ‘networks are open and several international currencies can coexist’, suggesting the dollar and the renminbi will share the role in the future
Trade balance improves after fiscal devaluation, study finds
European economists analyse the effects of a temporary fiscal devaluation in Spain and Portugal, finding it leads to improved trade balance
Robert Pringle’s Viewpoint: Stanley Fischer responds to the Fed’s foreign critics
The Federal Reserve vice-chair rightly insists that each nation should each keep its house in order; but the global village needs to be kept tidy as well
Fears surface over lack of trust among resolution authorities
Countries still do not trust one another enough to cooperate fully during the resolution of a globally systemic bank, participants at Chatham House event warn
RBA’s Lowe wants more market appetite for ‘real investments’
Deputy governor says key to returning growth and monetary policy to normality is persuading investors to create new assets rather than pumping up the prices of existing ones
West African countries take stock of ‘capacity building project’
The West African Monetary Institute is hiring an external consultant to review the $2 million project, as it works towards establishing second monetary union in region
Carney launches review into RTGS failure
Independent review will look into ‘technical issue’ that knocked RTGS system out of operation yesterday, and consider the central bank’s response
Constâncio says ECB needs new tools to tackle shadow banking risks
Vice-president says central bank will need a broader arsenal to cope with risks in the shadow banking sector, suggesting the US and UK both have powers that could be useful