Bank of England (BoE)
Carney admits Brexit is no longer UK’s biggest stability risk
Bank of England governor quizzed on importance of transitional arrangements for Brexit; external financial policy member defends forecasting, but admits “surprise” at the health of the economy
BoE paper tackles big data on Swiss franc de-pegging
Trade repository data sheds light on liquidity problems and market fragmentation around the removal of the SNB’s Swiss franc floor in January 2015
Haldane hopeful for ‘rebirth’ of economics
BoE chief economist believes crisis for the profession could lead to a break with past thinking; offers solutions to productivity problems
BoE paper experiments with measuring vulnerabilities
The study finds the US had highest levels of vulnerability in the run-up to the 2008 financial crisis, with Asia and Europe appearing “robust”; the picture has now reversed, authors say
BoE article sees benefits to agent-based modelling
“Bottom-up” approach is complementary to models that are already widely used; the Bank of England has created new models for both housing and corporate bond markets
BoJ and ECB collaborate on distributed ledger tech
The project will examine the possibility of running central bank infrastructure platforms in a DL environment; research will focus on payments and securities settlement
Inflation to reach 2% target in next six months, BoE says
MPC votes unanimously to leave rates unchanged at 0.25%; exchange rate appreciation suggests smaller overshoot of inflation target than previously forecast
Non-linear shocks create asymmetric policy impacts – paper
Bank of England working paper shows a shock to mortgage spreads has more of an impact on the real economy during periods of recession, with implications for policy
BoE’s Woods: firms favour ‘transitional’ Brexit period
Prudential Regulation Authority chief quizzed on best course of action for financial firms during Brexit process; “preferential” market access is not necessary, but seems sensible, he says
BoE studies effects of capital requirements on balance sheets
After the financial crisis, banks placed more emphasis on asset deleveraging and adjusted their capital management practices
BoE paper drops rational expectations to solve unemployment puzzles
Replacing rational expectations with adaptive learning helps fit the standard theory of unemployment to the data, economists find
UK inflation expectations leap in fourth quarter
Brexit shock appears to have driven increase in inflation expectations; satisfaction with Bank of England remains high, but looks likely to fall as inflation rises
BoE’s Salmon seeks to fix deadline for delayed Libor replacement
Chris Salmon sets three-month target to finalise transition plan and reach decision on design for risk-free rate
BoE’s Hauser praises plan for integrated retail payments scheme
Faster Payments, Bacs and Cheque Clearing to be integrated into one system, Hauser says; ISO20022 to make interbank payments “much easier” for the UK
Federal Reserve conducts in-depth study into distributed ledger technology
Central bank publishes first paper discussing the benefits of distributed ledger technology in the realm of payments, and clearing and settlement; use of DLT could address “financial frictions”
Carney hits back at critics of monetary policy’s distributional impact
Monetary easing has disproportionately benefited the poor, BoE governor says; loss of open markets “would be a tragedy, but is a possibility”
BoE unveils database of macro-prudential policies
Researchers attempt to classify the myriad forms of macro-prudential policy, compiling panel data on when policies were tightened and loosened in different countries
Tallow controversy forces Innovia to look at alternatives
Innovia to seek alternative to tallow as traces of animal extracts in the Bank of England's new ‘fiver’ sparks global review; Canadian and Australian banknotes also contain traces in guardian substrate
RBS falls short in latest Bank of England stress tests
Three banks show signs of “capital inadequacies” in the latest round of tests, with RBS forced to review its capital plan; Carney says global and domestic risk remains “elevated”, prompting the FPC to leave its buffer unchanged
BoE’s Vlieghe dismisses neo-Fisherian idea that low rates cause low inflation
MPC member says “small minority” of academics who suggest lower rates may cause low inflation do not present particularly compelling arguments
Financial markets should not write off uncertainty, says BoE’s Forbes
Bank of England deputy says the effects of uncertainty around Brexit could still materialise; uncertainty measures could “quickly shift”, says Forbes
BoE to adjust deposit protection limit again
Limits have seesawed in recent years, first due to the global financial crisis and more recently because of EU law
BoE’s Cunliffe: central banks not causing low natural rates
Quantitative easing has not caused rates to fall, but is rather responding to a low natural rate, deputy says; the fall in sterling could require deviation of the policy rate from the natural rate
Central banks should sacrifice some independence – Harvard economists
A group including the UK’s Ed Balls says central banks are losing legitimacy; handing over some “political independence” could reverse the trend without damaging policy outcomes