Financial crisis
Cyprus governor warns country has 'lost credibility'
Athanasios Orphanides tells parliamentary committee that budget measures must be pushed through quickly to restore confidence in Cyprus; warns the country has lost credibility
Central Bank of Tunisia makes plea to government
Newly formed interim government must act to restore investor confidence, says board of directors; calls for independence of the central bank to be protected
Credit booms linked to financial crisis – IMF paper
IMF working paper shows credit growth becomes less dependent on bank soundness during boom periods
BoE unveils gloomy Financial Stability Report
Bank of England Financial Stability Report demands banks boost capital levels; King says he initiated talks of co-ordinated swap line action with central banks around the world
RBI’s Subbarao discusses how to promote growth in India
Reserve Bank of India governor Duvvuri Subbarao says country needs to introduce several policies to boost growth and live up to image as regional giant
Netherlands Bank paper highlights risk of excessive reliance on wholesale funding
Netherlands Bank study says multinational bank subsidiaries’ access to parent bank and wholesale funding can increase instability
Reserves act as effective insurance mechanisms during crises: Central Bank of Brazil paper
Central Bank of Brazil study says accumulation of international reserve in lead up to crisis helped reduce burden on growth
The gathering storm
Solving the financial crisis increasingly looks beyond the reach of monetary and financial policies, writes Ludek Niedermayer. Worse could follow in 2012 for central bank balance sheets, he warns.
Eurozone fears spread worldwide
Indonesia drops rate in surprise move, Lithuania and Mexico slash growth forecasts as the UK prepares for “Armageddon”
Fears of widespread contagion are rising: RBA’s Lowe
Reserve Bank of Australia assistant governor Philip Lowe says growing turbulence in global markets due to mounting government debt and weak banking systems
Bank of England is ‘monetising the deficit’ with QE – Monetary Policy Forum
Former BoE employees agree the latest round of quantitative easing in the UK could be seen as a way of monetising the deficit; panellists stress Greece’s exit from the euro would be catastrophic
Central banks react to eurozone situation
Denmark and Romania lower benchmark rates and Australia lowers growth expectations; all point to continuing eurozone uncertainty as key decision-making factor
Argentina crisis lessons for Europe: CEPR paper
Centre for Economic Policy Research study says beleaguered eurozone countries can learn from Argentina’s financial crisis
St Louis Fed paper captures effect of crisis on composition of FDI
St Louis Federal Reserve study says rise in cost of capital during financial crisis left some US industries experiencing volatile foreign direct investment flows
Greek debt value halved after marathon EU discussions
New Europe crisis resolution deal brokered overnight in Belgium; EFSF extended, Greek debt cut, banks’ capital to rise and governance increased
Europe should learn from US mistakes
Former chairman of the Federal Deposit Insurance Company William Isaac warns Europe to heed the lessons from TARP and catastrophic public stress tests
BIS paper highlights growing risk of currency crises
Bank for International Settlements paper authored by Professor Robert Aliber outlines role of cross-border money flows in a currency crisis
Liquidity risks raised crisis funding costs: Bank of Italy paper
Bank of Italy study shows heightened liquidity risk caused interbank market spreads to widen during the financial crisis
Central banks shy away from euro reserves
New data from the IMF’s currency reserves database suggests reserves accumulation has slowed during 2011 and the appetite to hold euro reserves has also waned, particularly in emerging markets
Japan extends emergency relief measures
Emergency loan facility and relaxation of collateral eligibility standards extended; sign of Japan’s continued economic struggle
Bank of Israel reviews lessons learnt from crisis
Bank of Israel report looks at evidence from recent financial crisis and how policymakers can be more prepared in future
US watchdog highlights discrepancies in Fed emergency programmes
US Government Accountability Office says Fed on occasions failed to properly document processes and decisions during crisis; says opportunities exist to strengthen risk management practices