Eurozone
ECB to reduce monthly asset purchases to €30 billion
Central bank extends QE by nine months until September 2018, and keeps rates unchanged
ECB taper unlikely to upset major European equity investors
Norway’s sovereign wealth fund is boosted by its €200 billion investment in European stocks
Nouy: Europe’s bankers need courage for cross-border mergers
Bankers have “turned inwards” in the face of difficulties, says ECB supervisor
EBA and US agencies agree framework for cross-border resolution
Document lays out principles for information sharing and future crisis management agreements
ECB develops new overnight benchmark rate
The new rate will complement the existing overnight benchmark, Eonia
Irish governor calls for fiscal prudence
The government’s debt target may need to be revised, argues Lane
Big banks’ share prices more sensitive to rate moves – paper
Lower capital ratios diminish exposure to changes in the yield curve, says research
ECB cautions Slovenia over ‘critical infrastructure’ draft law
Legislation should not encroach on the central bank’s regulation of payments systems, says ECB
German court refers ECB bond purchases to ECJ
“Doubtful” whether PSPP is authorised by German and European law, says court
Credit spreads’ limited use as short-term predictors – paper
Researcher examines the accuracy of three sets of credit spreads
ECB and ESRB present database on European financial crises
New database will be key tool for macro-prudential authorities
IMF gloom on US and UK balanced by brighter spots elsewhere
IMF raises projections for China, Japan and eurozone as the UK and US falter; maintains global growth forecasts at 3.5% in 2017
Too early to tell if eurozone NPL reforms are sufficient – ECB
Changes to legal systems are “not keeping pace” with new laws
EC approves state aid for two Italian banks
Small regional banks will receive about €5 billion, having avoided resolution
Dombret defends SSM as a ‘supervisory framework’
Bundesbank board member acknowledges there are issues, including communication, with the SSM and suggests targeting language barriers to reduce “home bias”
Reserve managers see politics shaping currency allocations
European political uncertainty weakens confidence in euro, with sterling pressured by Brexit; dollar’s popularity resurgent, despite Trump’s economic policies
Brexit will be ‘litmus test’ for global system – Carney
Global financial system has reached “fork in the road”, says Bank of England governor; UK financial firms told to submit robust set of Brexit contingency plans by July
Book notes: Architects of the Euro, edited by Kenneth Dyson and Ivo Maes
This biographical study of the 10 key players in the development of the Economic and Monetary Union provides a contrast to more historical analyses
ECB set for €50 note launch
The European Central Bank is to launch the fourth banknote in the new Europa series on April 4; the new note will retain design elements from previous series, but will feature revamped security features
Eurozone instability tops reserve manager fears – survey
Threat of instability or weakness in the eurozone and fear of major asset price correction are greatest concerns for reserve managers in 2017, Central Banking survey shows
Hysteresis can explain eurozone peculiarities – Eichengreen and Bayoumi
Eurozone has not responded to shocks in the way economic theory would normally imply, with the German economy tied surprisingly closely to those of ‘peripheral’ countries
IMF authors examine conditions for structural reform success
Most labour and product market reforms strengthen medium-term output and fiscal sustainability, but they may be painful to implement in some parts of the cycle
‘Substantial’ accommodation must continue – Draghi
ECB president says underlying eurozone inflation remains “subdued”, despite rise in headline rate; he sounds the alarm over the possibility of a “competitive devaluation” by advanced economies
NGO calls for changes to ESM’s governance
Klaus Regling welcomes some of Transparency International’s conclusions