Financial crisis
NY Fed paper studies when government should issue safe assets
Model implies only under certain situations should the government issue new debt; changing inflation target might be superior
Italian paper looks at eurozone firms' capital costs
Fall in borrowing costs in periphery due to balance sheet improvements, researchers find
Authorities can’t rely on monetary policy to fight next crisis – Rohde
Danish governor says rebuilding capital buffers should be a priority
Canada’s polymer versus paper substrate cycle
Empirical evidence indicates the switch to a polymer substrate has improved the lifespan of Canadian banknotes, write Ramesh Paskarathas, Lynne Graaskamp, Erik Balodis and Theodoros Garanzotis
Researchers develop new index to measure geopolitical risk
Heightened threats slow growth and equities returns in advanced economies, paper finds
IMF stresses communication’s role in fostering stability
Neglecting its importance can lead to adverse reactions, such as misinterpretation of policies
Fed paper examines financial spillovers of US monetary policy
Authors find that conventional and unconventional policies create different spillover effects
Authorities need to deal with ‘limitations’ of global standards
The BIS’s Fernando Restoy says global standards do not cover all possible risks, and national supervisors need to fill in the gaps
Italian consumer lending more risk-priced post-2008 – paper
Institutions tightened lending to consumers based on household factors
UK’s Treasury Committee publishes contentious report on RBS
Report had been protected under UK confidentiality laws, but parliamentarians chose to publish it regardless; report highlights “widespread inappropriate treatment” of customers
Carney extols value of clarity of thought and communication
Bank of England governor delivers speech on virtues of a good leader
Post-crisis fiscal cuts boosted solvency without harming liquidity – DNB paper
Dutch paper uses yield spreads to analyse impact of consolidation announcements on investor perception of government solvency
Saudi Arabia’s Alkholifey on economic restructuring, reserves and cyber security
The Saudi Arabian Monetary Authority’s governor talks to Christopher Jeffery about the restructuring of the Saudi economy, the impact of low oil prices on reserves and anti-money laundering efforts
People: Tunisian governor resigns; EFSF appoints chairman
Governor Ayari quits after Tunisian prime minister initiated the process to replace him; EFSF picks new chairman; European Commission proposes new chief for Systemic Risk Board
RBA paper proposes new method of mapping the banking network
“Density-based” approach helps overcome shortcomings of other methods, authors say
Lacklustre recovery down to pre-crisis factors – research
San Francisco Fed article says weak recovery in the US due to long-running factors, and not the immediate impact of the global crisis
BoE’s Cunliffe sees liquidity risk in rise of investment funds
Investors have poured money into less liquid instruments at a time when market liquidity has been falling, warns the BoE deputy governor
US real GDP growth accelerating in 2018 – Atlanta Fed
The real-time index GDPNow forecasts an annualised expansion of 4% in the first quarter
Nordic and Baltic states reinforce regional financial co-ordination
Banks operating across the region require common macro-prudential measures
Interest rate risk could be seed of next crisis – economists
Financial markets may have underestimated the persistence of low rates, and regulations have amplified the threat, say Srichander Ramaswamy and Philip Turner
A dangerous unknown: interest rate risk in the financial system
Urgent action is needed to tackle the little-understood build-up of interest rate risk in the global financial system; macro-pru tools still inadequate to tackle the issue
Fed unveils 2018 stress tests for big banks
The severely adverse scenario would take the unemployment rate to 10% from 4.1%
Banks not necessarily more opaque than other firms – BIS paper
Study compares stock returns of those with insider knowledge against the wider market
BoE’s Brazier flags concerns about ‘stretched’ credit markets
BoE is simulating ‘liquidity mismatch’ in bond markets to ensure financial stability, says executive director; central bank has a ‘duty’ to adapt regulation