Research
Policy-makers could use fraud patterns as economic indicator – paper
Positive relationship exists between bank fraud and the macroeconomy, Chicago Fed risk specialist finds, suggesting fraud could offer an early warning sign of crisis
Italian firms' leverage well above average, study finds
Italian non-financial companies’ leverage ratios are significantly above the eurozone average, a working paper shows
Latin American countries may be especially exposed to US monetary policy, paper finds
These economies may be more vulnerable than most emerging markets to the normalisation of US monetary policy, claims a Bank of Spain paper
Rajan and Mishra lay down rules of the monetary game
Authors warn current models may display the policy biases of those who built them, calling for better dialogue and analysis of monetary policy spillovers
Four largest eurozone economies show different reactions to monetary policy, paper finds
The economies of Germany, France, Italy and Spain show marked differences in responding to policy rate rises, researchers argue
Global financial safety net relies on maintaining IMF resources – paper
Regional funding arrangements and credit swap lines have grown in importance in providing support in times of stress, but maintaining IMF funding remains key, paper says
IMF paper explores spillovers from conventional and Islamic finance
Research considers how monetary policy should adapt to the different stages of development of Islamic finance, and its interactions with conventional finance
Fed QE drives portfolio rebalancing towards foreign assets, Brazil paper finds
Research analyses ‘comprehensive’ dataset for Brazilian capital flows and a smaller one for other EM economies
Currency networks shape global spillovers, BIS authors find
Authors make use of recently enhanced BIS data sets to map currency networks, studying how these affected the risk-taking channel of monetary policy during the ‘taper tantrum’
Inflation and unemployment affect wage rigidity, Icelandic authors find
Research challenges New Keynesian assumption that timings of wage changes are exogenous, showing level of inflation and unemployment also matter
Researchers propose adapted methodology to assess money market microstructure
The standard algorithm used to assess bilateral exposures in the interbank market needs adapting to make it robust to zero and negative interest rates, two economists argue
Tests find New Zealand banks ‘robust’ to dairy stress
Stress tests conducted by the Reserve Bank of New Zealand in late 2015 find five largest lenders to dairy sector can withstand further drops in payout and land values
Bank capital matters for risk-taking channel of monetary policy, Norges Bank paper finds
Less capitalised Norwegian banks are more likely to extend credit to risky firms in response to a cut in the policy rate, author finds
IMF paper examines effect of ‘winning the oil lottery’
Research into the impact of oil discovery in certain municipalities in Brazil shows GDP per capita and urbanisation on the rise
Stressed governments persuade banks to increase bond buying, paper finds
European governments under fiscal stress persuaded domestic banks to increase their holdings of sovereign debt, a paper from The Netherlands Bank finds
Macro-prudential policy must give guidance on how to deleverage, paper says
Different deleveraging methods have varying effects on the economy, ECB working paper finds; policy-makers must give banks concrete guidance on how they implement certain measures
‘Compositional’ drag on wages set to fade, BoE article finds
Labour force composition has changed markedly in recent years, putting downward pressure on wages, but recent data implies the effect may soon dissipate, researchers say
Paper uses machine learning to nowcast GDP in Lebanon
Working paper published by IMF explores use of machine learning technique in assessing economic conditions in Lebanon, where analysis is a ‘distinct challenge’ on account of data lags
Paper finds evidence in favour of ‘exchange-rate-anchored inflation targeting’
A working paper published by the IMF finds ‘tight management’ of the exchange rate can help support inflation targeting in ‘less developed countries’
Regulation affects pass-through to current account, BoE paper finds
Discussion paper sets out theoretical and empirical backing for idea that low rates can cause a current account deficit to grow, in the presence of liberalised financial markets
Securitisation can dampen business cycles, paper finds
When securities are bought by ‘non-financial agents’ instead of financial intermediaries, they can help dampen rather than amplify cycles, research says
Central bank models need to adjust to nature of exchange rate pass-through, paper says
Exchange rate pass-through shown to be incomplete, endogenous, nonlinear and asymmetric; working paper seeks to quantify effect over time
Networks did not spread 2008 shocks in eurozone money market, paper argues
Banking networks in the eurozone did not play a major role in spreading shocks in the financial crisis, ECB working paper argues; eurozone banks are ‘not network dependent’
US monetary policy contraction means drop in global output – paper
Raising interest rates in the US leads to lower global output and inflation in the short term; most 'pronounced' responses evident in the mid-1990s to mid-2000s