Research
BIS paper weighs effectiveness of FX intervention strategies
Intervention to reduce volatility or to lean against exchange rate movements each come with distinct costs and benefits, working paper finds
Colombian paper considers reaction functions in payments
Working paper examines how different entities within a large-value payment system react to failures within that system, finding that a range of factors are in play
CNB paper questions strength of ‘border effect’
Studies using outdated methodologies overestimate the impact of national borders on trade, authors say; effect is stronger in emerging markets
Visual interfaces ‘hold promise’ for policy-makers
Working paper published by ECB finds ‘analytical visualisations and interactive interfaces’ can help with the communication of risks; presents macro-prudential data cube
Forward guidance can help QE succeed, Finnish research says
Article in Bank of Finland bulletin considers whether eurozone is at risk of Japanese-style deflation, finding the ECB’s asset purchases reduce the odds of this outcome
RBA research suggests options for IMF to overcome governance issues
Analysis of constraints on IMF actions suggests seeking backup from other international organisations could add to political clout, but quota reform remains a problem
ECB paper emphasises importance of time horizons for early-warning models
Working paper finds the selection of a particular time horizon can have ‘considerable implications’ for the performance of economic variables in predicting bank crises
RBA research finds CCP rules are effective in containing severe shocks
Paper tests central counterparties under extreme ‘tail of tail’ scenarios and finds new rules designed to promote their stability are effective
IMF paper warns against ‘overburdening’ LatAm central banks
Working paper studies evolution of central banks in Latin America, and warns against jeopardising the credibility they currently enjoy by handing them new mandates
Finnish paper charts evolution of PBoC policy since 1999
Discussion paper asks whether China has shifted toward a ‘price-based policy’ and finds the PBoC has become more responsive to changes in economic conditions in recent years
Paper examines role of capital in BHC lending decisions
Authors find an increase in capital requirements of bank holding companies is ‘likely’ to increase the interest rate charged on loans, resulting in a ‘significant’ reduction in lending
Spanish paper analyses impact of securitisation on bank capital structures
Securitising banks ‘increase their loan volumes and their ratios of loans over total assets,’ changing their business model, working paper finds
BoJ’s easing boosts inequality, warns IMF paper
Working paper finds attempts to meet Japan’s 2% inflation target are increasing income growth and inequality; calls for structural reform to make this growth more inclusive
Finnish paper: DSGE model with shadow banks sheds light on China
Bank of Finland discussion paper models Chinese monetary policy transmission using a DSGE model augmented with shadow banking and interest rate controls
IMF paper sees lower inflation boosting Indian savings
Working paper says a ‘sustained reduction in inflation’ would help create interest rate environment necessary to boost corporate profitability and encourage household savings
ECB paper models Philips curve from professional forecasts
Working paper finds the curve consistent with professional forecasts has flattened since the financial crisis, with the relationship between inflation and unemployment weakening
Chilean deputy analyses savings practices
With savings levels ‘clearly lower than those of most advanced countries,’ the Central Bank of Chile’s deputy governor proposes several courses of action in an economic policy paper
Colombian paper analyses impact of bank size and risk on policy transmission
Commercial banks with less credit risk on their books can ‘maintain a relatively good growth in the supply of credit’ when faced with a monetary policy shock, research finds
Colombian paper finds structure matters in modelling oil shocks
Working paper finds evidence that the impact of an oil price shock on an oil-exporting country such as Colombia can be large, but depends on the structure of the economy
BIS paper says liquidity regulation should not replace lender of last resort function
Lender of last resort and liquidity regulations perform separate roles, and therefore one cannot replace the other, working paper says
Research considers effects of delaying fiscal consolidation on GDP
Working paper published by the IMF finds there are no ‘substantive gains’ to be had in GDP from delaying consolidation if multipliers are constant
Richmond Fed paper analyses new banks decline
If the rate of new banks continues to fall, it will have a large impact on the banking sector as well as the flow of credit in the economy, according to research published by the Richmond Fed
French paper models flattening Philips curve
Working paper develops a two-country, new-Keynesian model to replicate the flattening of the curve in developed countries over the past 25 years, a trend widely attributed to globalisation
IMF researchers add eurozone detail to fund’s global projection model
Working paper adds ‘blocks’ for Germany, France, Italy and Spain to the model in an effort to capture the dynamics in the eurozone in greater detail