Europe
EU needs radical fiscal reforms, IMF report says
Framework would aim to free ECB from having to stabilise sovereign bond markets
ECB raises rates by 75bp for the first time
Lagarde warns monetary policy will not bring energy prices down
Joseph Stiglitz on the challenge of fixing macroeconomics
The Nobel Prize-winning economist discusses the flaws in mainstream models and how to repair them, whether central banks went wrong in 2021, and what to do – or not to do – about inflation
ECB expected to deliver first-ever 75bp rate hike
Record-high inflation of 9.1% in August and a weak exchange rate put pressure on divided governing council
Eurozone repo markets are slowing policy transmission, ECB paper says
Dealer banks use market power to get better prices from other institutions
Reverse bond auctions are useful crisis tool, ECB paper finds
DNB’s use of reverse auctions increases liquidity and stability of bill market, researchers say
Banknotes: July to September 2022
A round-up of news and salient issues that have affected central bankers in the past three months
BoE’s planned procyclical capital hike bewilders banks
Some doubt regulator will go through with counter-cyclical buffer hike while forecasting recession
Will the dollar remain the world’s reserve currency?
Bank of Russia sanctions are unlikely to undermine the US dollar’s central role in reserve portfolios. But a relative decline in US economic weight and technological innovation are benefiting other currencies
ECB appoints expert advisers on supervisory process
Members include former Japanese FSA head Himino and Bank of Canada deputy Rogers
ECB’s Lane and Schnabel strike different notes on eurozone inflation
Schnabel says “right tail” shift could herald de-anchoring, but Lane says other outcomes are possible
Most central banks carry out frequent stress tests
All banks that carry out stress tests say they have improved financial stability
Banks shock commodities by 1,000% in stress-test rethink
Energy price spikes force clearing firms to consider extreme or even ‘implausible’ scenarios
Cyber attacks on financial market infrastructure are rising
Two-thirds report recent increase in attacks, but 80% report good cross-border arrangements
Gontareva on Ukraine’s funding, NBU policy and reconstruction
Former NBU governor Valeria Gontareva speaks about donor funding shortfalls, NBU policy and financial stability challenges, Nabuillina and the seizing of Russian assets, and post-conflict rebuilding and modernisation
Over half of central banks say AML risks are rising
But most say central banks co-operate sufficiently across borders against money laundering
Geostrategic risks now a major factor – CNB reserves head
Ondrej Strádal supports use of CBR reserves for reparations, is reassessing renminbi allocations and has US recession as a ‘base case’ scenario
Central banks rarely lead AML/CFT efforts
Most institutions do not want more AML/CFT powers
Earnings in upper-middle income economies outstrip high income peers
Financial stability staffing tends to match jurisdiction’s income level
Glapiński accuses Germany of wanting to redraw land borders
Polish governor warns on plans for EU super-state as German foreign office calls claims “absurd”
Most central banks lack primary oversight of NBFIs
Many institutions capable of regulating non-banks, but just a few solely exercise such powers
A quarter of central banks have insufficient financial stability powers
Some respondent institutions need new powers urgently
Is money growth really the main inflation culprit?
Jakob de Haan and Jan-Egbert Sturm take a closer look at inflation in the eurozone and Switzerland
Middle income countries more likely to report rising NPL levels
Most high income respondents say NPL levels have fallen in last five years