United States
OCC warns on cyber risks from subpar patches at US banks
Regulator says banks have good track record overall, but exams reveal weaknesses
Chicago Fed’s Evans: central bankers may be biased against inflation
Chicago Fed president thinks current policymakers may have overcompensated for inflationary bias of the past
No ‘Taylor rule’ without Meltzer’s support
John Taylor says he would “likely have done other things” if not encouraged by Allan Meltzer to develop the eponymous rule
Kashkari chooses between ‘faith and data’
Minneapolis Fed president says FOMC should have waited to see if inflation rise was transitionary before raising rates in June
People: Fijian deputy takes over in interim as Whiteside departs; FCA chairman to step down
Fijian deputy governor takes over as interim governor as Whiteside departs; FCA’s John Griffith-Jones to leave next year; Fed’s payment system director to retire; and more
Making the rules and breaking the mould (Allan Meltzer: 1928–2017)
John Taylor writes about the extraordinary life of a pioneering economist whose lifelong work defied traditional rules – but one who strongly advocated them for central banks
Crapo: US Treasury reforms will be ‘complicated’
Democrats unlikely to back changes that benefit big banks, Senate banking committee chair says
Yellen willing to reassess 2% target
Fed chair says question of the right target level is one of the most important facing central banks today; wind-down of QE likely to be dull, she adds
FOMC votes for hike but stays cautious on outlook
Fed committee votes for second rate hike of 2017, but enthusiasm for further tightening appears to be fading
New US dollar bills will not be polymer – Fed official
US plans to launch a new family of banknotes that will have more intaglio printing; Fed’s Lambert sees a bright future for cash
US Treasury proposals seek to water down Basel III
Proposals include axing parts of liquidity rules, reducing the use of stress testing and the possibility of allowing banks to opt out of the Volcker rule
Term premiums matter for inflation – BoJ paper
Term premiums domestically and abroad appear to affect inflation via the exchange rate channel, authors find
Yellen told inflation target needs revising
Economists say current economic conditions call for a revision in the inflation target; Federal Reserve should appoint commission to advise on “path forward”
People: Trump names Otting for OCC job; Sri Lankan assistant governor promoted
People: Trump names Otting for OCC job subject to Senate approval; Sri Lankan assistant governor promoted to deputy role; Barbados appoints acting deputy; and more
Possible Fed appointments on the horizon
Treasury department official Randall Quarles and former Fed staffer Marvin Goodfriend believed to be on the shortlist; no date yet for appointment announcement
Book notes: Fed Up, by Danielle diMartino Booth
A “fascinating but annoying” account by a US Federal Reserve insider who openly criticises the culture of the US central bank and policy decisions made by the institution leading up to and following the financial crisis
Fed paper warns on helicopter money risks
Tool appears much less powerful when less realistic elements of the New Keynesian framework are removed; other options could work better, authors say
Inflation is preventing interest rates from rising faster, says Powell
Labour market progress points towards a faster pace of normalisation for the Fed, but below-target inflation is preventing rates from rising above the current “gradual pace”
Model risk falls under the CCAR microscope
Fed using qualitative reviews to test the quality of model risk governance
Brainard turns cautious on inflation concerns
Lack of wage growth and lower than expected inflation data could slow further monetary easing, says Fed governor; interest rates are likely to rise “soon”
Deutsche Bank fined further $41 million by Fed
US central bank finds fault with banking giant’s AML function, months after UK regulators imposed similar fines; Deutsche has two months to submit reform plans
Book notes: Crash Bang Wallop, by Iain Martin
A comprehensive study of the City of London and how it became the world’s leading financial centre prior to the financial crisis and the UK’s vote to leave the European Union
Fed minutes shed light on balance sheet shrinkage plan
System of caps would allow gradual reductions in the reinvestment of securities held under the QE programme
DLT expert: central banks should consider wider uses than just payments
Instead of payments, central banks should look to implement DLT for identity document transfer, says Michael Mainelli; expert takes more cautious view of the technology