Research
Impact of flight to liquidity on bonds important for policy-makers, study finds
The effects of flight to liquidity episodes on bond markets ‘are important for policy-makers’, since they are associated with ‘lower macroeconomic confidence’, research finds
IMF paper: Costs of macro-pru policies still unclear
Policy-makers should ‘move carefully' in adopting macro-prudential tools as ‘knowledge is still limited', working paper argues
IMF praises Central Bank of Kuwait’s ‘proactive’ approach
Central bank is ‘proactive’ in its liquidity management and macro-prudential supervision, IMF report says; publishing more timely information on oil sector would be ‘useful’
Irish research finds macro-pru tools have ‘greater impact’ on first-time buyers
Economic letter published by Central Bank of Ireland explores impact of loan-to-value and loan-to-income ratios on different groups within residential property market
Healthy domestic variables can smooth rating downgrades, paper finds
Good domestic variables can help a country recover from a sovereign rating downgrade, but these fundamentals have little capacity to accelerate on an ‘upgrade cycle’, research finds
BIS paper spots correlations in capital control effects
Study of emerging market capital controls finds bonds flow into other regional countries if one loosens its controls, but the effect is weak when countries tighten
Central banks should consider financial stability when setting monetary policy, finds BoJ paper
Discussion paper published by the Bank of Japan argues the risk-taking channel of monetary policy has ‘become more important’ as financial intermediation has moved to markets
Cluster effect helps explain size of UK banking sector, BoE bulletin finds
Firms and people locating near one another means banks may be able to provide services more efficiently in the UK than other countries, researchers say
BIS quarterly review warns even high quality securitisations carry risks
Quarterly review article says even simple, transparent and high-quality securitisations create uncertainty, making estimating risks tricky, especially in mezzanine tranches
SNB working paper examines drivers of Swiss franc real exchange rate
Research finds terms of trade and relative government are ‘the most significant explanatory variables’, while Balassa-Samuelson effects are unimportant
Spanish working paper explores inflation dynamics
Research considers the impact of different industrial structures on the response of inflation to technology, interest rate and entry cost shocks
Resource costs of Australian payments system down as percentage of GDP
Consumers face similar cost for credit and debit card payments despite higher cost of credit cards to the economy, RBA paper finds
Liquidity surplus has minor effect on short-term interbank rates, Riksbank article finds
Larger liquidity surplus in Swedish banking system since 2007 linked to downward pressure on short-term interbank rates, but effect is minor as most is invested in Riksbank Certificates
Icelandic research proposes new measure of core inflation
‘Dynamic factor measure' outperforms current core measures in terms of matching the mean of CPI inflation while having lower volatility, argues author
BoE researchers posit dual model of interbank markets
Working paper separates exposures from funding to show the two parts of the interbank market have different structures; large ‘core’ banks present contagion risk
BoE paper says loan fair value techniques come with 'health warnings'
Researchers say it is unlikely that any one technique will capture all relevant aspects of valuation across all types of bank loans
ECB paper uses financial conditions indices to help predict growth developments
Working paper presents indices for three industrialised and five emerging economies; authors say they are a potential leading indicator for eurozone external environment
Bank of Finland paper sees inefficiencies driving China’s internet finance
Boom in internet finance presents stability risks and appears to be the result of inefficiencies in the existing financial system; authors recommend market-based reforms to redress the balance
Lower liquidity has impeded Swedish markets, central bank survey shows
The Swedish markets are functioning 'slightly less well' than six months ago and will deteriorate further, a risk survey conducted by Sveriges Riksbank finds
Money-inflation link shows signs of breaking down - Bundesbank paper
Researchers present evidence that money growth and inflation are losing synchronicity in the medium- to long-run, although the relationship still holds in the very long-run
Global housing trends can predict domestic financial stability – Norges Bank paper
Crisis probability increases markedly when ‘bubble-like behaviour' in the housing and credit markets coincides with high leverage, research shows
Oil price forecast errors impact wider inflation estimates, Banque de France study finds
When there is ‘large’ volatility in oil prices, the pass-through of forecast errors to inflation estimates increases, research finds
Klaas Knot: It’s up to governments now
Netherlands Bank president tells parliament that European governments will have to boost growth and ‘stir up’ inflation themselves; latest central bank bulletin reinforces point
BIS paper warns Basel III likely to prove ‘challenging’ for emerging markets
Working paper points to a number of obstacles to implementing the Basel framework in emerging markets and developing economies, and suggests potential solutions