Liquidity
James Bullard on the Fed’s policy review, FSOC and forecasting jobs data
St Louis Fed president discusses his support for average inflation targeting, his concerns about US Treasuries market function, non-bank regulatory weakness and negative rates, as well as the unexpected success in using Homebase data to predict highly…
Weak banks undermined first round of QE – BoE paper
Undercapitalised banks took defensive measures rather than boosting lending, research finds
Facebook’s libra could disrupt collateral markets – IMF paper
Collateral used to back ‘stablecoins’ such as libra will be unavailable for reuse
New York Fed paper examines MBS price dislocations in March
Flight to safety and dealer balance sheet constraints widened cash-forward basis, researchers find
New Fed discount window could ease bankruptcy crisis – researchers
Many companies may not endure a further liquidity shock
Taiwan central bank open to more onshore insurer FX hedging
Central bank suggests lifers can use onshore swaps to hedge dividends, but some warn it could hit NDF market
Emerging markets face ‘uphill battle’ against pandemic – IMF staff
EME countries face limited fiscal space and possible solvency crisis, warn researchers
Fed paper looks at effects of negative rates on banks
Banks with large holdings of liquid assets could be hurt by negative rates, researcher says
CLS proposes second-tier FX settlement system
Stripped-back system for EM currencies mooted to tackle rising settlement risk
Flight to safety was not enough to fund credit line draws – Fed research
Many banks had to turn to non-deposit forms of borrowing, researchers find
Fed extends emergency facilities for three months
Move comes as US Covid-19 reported cases surge to record highs ahead of July FOMC decision
Structural changes may increase dollar funding strains – IMF paper
Some emerging markets still face “significant funding pressure”, researchers find
IMF lifts limits on financial support facilities
Decision provoked debate among board members on whether fund should be taking additional risk
Dominican Republic launches facility to tackle pandemic impact
Equivalent of $1 billion made available for firms and households, but regulatory relief could raise stability concerns
BoC announces new securities lending programme
Move is consistent with BIS recommendations, central bank says
Book notes: The state of economics, the state of the world, edited by Basu, Rosenblatt and Sepúlveda
The 2016 contributions of Nobel Prize-winning economists and others remain relevant to today
Dealer capacity tightened significantly in March – Fed research
US primary dealers’ capacity to absorb Treasuries fell by 17% in March, economist finds
National Bank of Georgia upgrades FX infrastructure
Move follows other financial market infrastructure reforms in recent years
Yellen and Bernanke call for Treasury market reform
March's market gyrations demand close look at infrastructure and regulatory framework, former Fed chairs say
IMF and World Bank chiefs call for more action on debt relief
But G20 fails to agree extension to the Debt Service Suspension Initiative
ECB expands euro repo network
Albania and Serbia join Covid-19 liquidity backstop
Fed expands ‘Main Street’ facility to serve non-profits
New loan options and wider eligibility to support credit flows to charities, hospitals and universities
The evolving role of central bank money in payments
The line between commercial and central bank money continues to blur, but the multiple-issuer/one-currency paradigm underpinning the current monetary system is set to remain in a CBDC world, write Ulrich Bindseil and Ignacio Terol
Fed’s repo market footprint goes back to zero
NY Fed has no outstanding repo interventions for first time in 10 months