Liquidity
US dollar dominance: beyond the ‘exorbitant privilege’
Biagio Bossone argues that dollar ‘seigniorage’ extends into the very structure of global finance and its ‘exorbitant privilege’ is worth up to $804 billion annually
The interest rate dilemma in an uncertain world: a balancing act
Biagio Bossone makes the case for a holistic policy approach that includes extending IT tolerance bands, smart fiscal policies, supply-side reform and financial safeguards
EMs resilient to US monetary spillovers, panellists say
Turkish and Thai governors discuss policy challenges at IMF conference in Saudi Arabia
Banks’ leverage ratio ‘over-calibrated’, says Fed’s Bowman
Heavy capital requirements causing illiquidity in Treasury market, governor says
Information impacts dealers’ behaviour in crises – BoE paper
“Information chasing” helps explain how prices are set during liquidity shocks, authors say
RBI injects billions into liquidity-strapped financial system
Analysts say decision points to rate cut by India’s central bank in February
Non-banks and banks are interwoven, says ex-RBI official
Policy-makers should study connections between them when crafting regulations, argues Viral Acharya
Unexpected rate hikes push down commodity prices – research
The most traded commodities are more vulnerable to monetary policy shocks, BoE paper shows
Central banks need to step up their crisis management plans
Patrick Honohan argues that robust preparation can better protect reputations in the event of a crisis
Book notes: Central bank capitalism: monetary policy in times of crisis, by Joscha Wullweber
This book asks if independent monetary policy is feasible at a time when central banks prop up the poorly regulated shadow banking sector
Liquidity risk: finding the right balance amid growing challenges
2023 banking turmoil is leading to a rethink of liquidity requirements, writes Manoj Singh
Madagascar’s governor on targeting M3 over inflation
Central Bank of Madagascar head Aivo Andrianarivelo speaks about introducing an interest rate corridor, diversifying from dollars to gold, using instant payments to bolster inclusion and drawing on IMF sustainability funding
Book notes: Default: the landmark court battle over Argentina’s $100 billion debt restructuring, by Gregory Makoff
Required reading amid current high sovereign debt, global tensions and the urgent need for climate finance
CNB’s Aleš Michl on tackling inflation, Friedman’s legacy and ditching DSGE
The Czech governor speaks about policy mistakes, targeting M2, diversifying into equities and gold, building new models and ending interest payments on minimum reserves
FSB launches plan to rein in non-bank leverage
Limited data and uneven regulatory mandates pose major challenges
Assets held by risky non-banks grew to record high in 2023 – FSB
Surging asset prices caused sector to grow more than twice as fast as banks
Banks should be operationally ready for liquidity support – BIS
Institution calls on authorities to improve lenders’ preparedness for central bank liquidity
Fed stress-testing operational readiness of discount window
Experts say consultation on improved ops should be accompanied by focus on willingness to borrow
FSB urges non-banks to improve liquidity risk management
Report lists eight recommendations on how funds can answer margin and collateral calls
BoE’s non-bank liquidity facility to open for applications in 2025
Other central banks have shown “lots of interest”, says deputy governor
South Korea pledges ‘unlimited liquidity’ to stabilise markets
Authorities ready to support stock, bond, short-term funding and FX markets amid political turmoil