Research
Riksbank paper evaluates inflation conservatism
Researchers consider how the timing of fiscal and monetary policy decision impacts the desirability of strict inflation targeting
Banque de France paper offers alternative to China's exchange rate regime
Banque de France working paper outlines alternative model to China's exchange rate policy involving capital mobility and no central bank intervention
Bank of Finland paper quantifies Basel II shortcomings
Researchers evalute the extent to which the low level of loss-absorbing capital prescribed by Basel II increased the risk of unexpected loan losses taking out a bank
Bundesbank paper presents redesigned DSGE model to tackle unconventional policies
Researchers develop DSGE model using two types of banks, repos and haircuts to yield a better understanding of unconventional monetary policy
IMF paper says ECB can do more to fix broken transmission mechanism
Working paper identifies credit channel as a major malfunctioning component of the eurozone monetary transmission mechanism and suggests possibilities for fixing it - including asset purchases
Canadian bonds more normal than US and UK equivalents at ZLB
Canadian sovereign debt yields are more responsive to shocks than UK and US equivalents at zero lower bound; differences diminish at shorter maturities
Close elections kryptonite for foreign investors, Fed research finds
The timing of national elections causes FDI flows from US firms to affiliates in more than 40 countries to drop by an average of 12% compared to non-election years, according to Fed research paper
Falling asset prices 'significantly associated' with onset of G-7 recessions
IMF working paper examining the usefulness of asset prices in predicting recessions in the G-7 countries finds equity price drops are larger and more frequent than house price drops
Canadian yields shown to be less sensitive to data shocks than US or UK
Working paper from the Dutch central bank shows that at the zero lower bound, Canadian government bond yields are less sensitive to surprising domestic data than US or UK equivalents
Global banks reduce frictions in international capital flows, say NY Fed staff
NY Fed staff report findings are consistent with research on reduced incidence of crises in local markets where banks have branches or subsidiaries; effects appear to be heterogeneous
ECB research examines ‘inverted V’ yields around bond auctions
Working paper finds yields spiked around auctions during crisis-hit Italian bond issues, creating additional costs for the government that Germany did not face
Composite indicator shows Swedish banks' systemic importance varied through crisis
Riksbank research finds large time-based variations in the systemic importance of Sweden's four biggest banks before, during and after the financial crisis
IMF working paper examines tools to measure interconnectedness
Network analysis and price-based measures are both used to measure interconnectedness in systemic risk; paper finds many tools can reduce systemic risk, but interaction is not clear cut
RBNZ bulletin tackles inflation, macro-prudential policy and reserve bank capital
Latest issue of Reserve Bank of New Zealand's bulletin examines why inflation has remained low despite healthy economic growth
Fed paper models monetary and fiscal policy interdependence
Working paper analyses interdependence between monetary and fiscal policy-making, testing policy experiments and finding a ‘non-negligible’ interaction between the two
US monetary policy weakened by fees and interest changes, paper finds
Research finds payment of interest on excess reserves and higher fees on uncollateralised overdrafts boosted efficiency but damaged the Federal Reserve’s monetary policy
ECB paper develops macro-pru tool probing impact of sudden capital outflows
Results show limited impact of a liquidity shock on banks' solvency ratios in the short term, but ‘moderate to high' effect on the supply of credit to the broader economy
Fedwire data can give accurate picture of interbank fed funds market, paper shows
NY Fed researchers find Fedwire-derived data on fed funds borrowing are strongly correlated with the figures subsequently reported by banks
IMF paper discerns East African transmission mechanisms
Transmission mechanism ‘functions best' when signals are clear and the monetary regime simple and coherent; non-monetary factors are ‘main drivers' of macroeconomic outcomes in examined countries
ECB paper says regional macro-prudential tools would mitigate eurozone imbalances
Macro-prudential tools such as loan-to-value limits could help prevent imbalances between the eurozone core and periphery if applied on a regional basis, according to ECB research
US fiscal stance is creating inflation, says Riksbank paper
Researchers show the existing unsustainable levels of US federal debt are generating inflationary pressures, but these are difficult to spot as they are being dwarfed by Fed policy and economic slack
Rosengren paper tackles role of banks in monetary transmission
Boston Fed president presents evidence on the effectiveness of the bank lending channel and provides observations about likely consequences of changes associated with the financial crisis
Australian sovereign bond market infrastructure developments analysed
Reserve Bank of Australia article provides an overview of the CBS market and assesses recent changes in the market infrastructure
BIS papers probe LatAm currency interventions
Working papers written by economists from each of five Latin American central banks and published by the BIS investigate the efficacy of various currency intervention strategies