Liquidity
Daily open market operations paying off – National Bank of Denmark
Introduction of daily open market operations has smoothed liquidity management, stabilising the money market reference rate
BoE’s Jackson: need to intervene on market function still an open question
Head of forex and reserves management discusses evolving understanding of flash events, market structure, and whether there is a case for further intervention
Latin American central bank interventions 'mitigate' liquidity shocks
Central banks more concerned with global factors than structural changes to forex markets; post-crisis regulation and tech advancements proving problematic for market makers
BIS authors spot structural break in bank financing
Research identifies turning point in how banks fund themselves around 2008, with greater reliance on branches and subsidiaries
Iran needs to overhaul monetary operating framework – IMF
Absence of policy rate and emergency lending facilities is creating instability, fund warns; central bank council “dominated” by representatives from other government agencies
Caruana: financial globalisation is not over
BIS chief says “peak finance” has not arrived, despite signs of a slowdown in global banking activity; warns against inward-looking policy-making
Basel III LCR affects RBI monetary operations – paper
Liquidity coverage ratio affects the central bank’s operational target via its impact on the unsecured overnight money market
Kuroda flags need for better network of emergency forex liquidity
Bank of Japan governor warns network of swap lines among major central banks may not be enough as systemic banks reach into a broader set of regions
Danish paper examines funding costs in stress test scenario
Banks unable to attract funding quickly in a liquidity crisis, author says; model underscores importance of incorporating funding costs into stress tests
IMF gives thumbs up to Indonesia’s new monetary operating framework
Interest rate corridor and switch to new policy rate has improved monetary policy transmission, early data shows, but further reforms could strengthen framework further
Regulations and QE impacting repo market – ECB’s Mersch
Executive board member says “confluence of factors” has boosted demand for collateral and impaired its supply, but the situation may improve
Non-banks may amplify risks from policy divergence, Nakaso warns
Non-banks may be less constrained than banks in supplying dollar funding, but it could dry up at the first sign of trouble; the BoJ starts stress testing foreign currency liquidity
Denmark to trial primary dealer payments in effort to boost liquidity
Central bank says payments in exchange for tougher requirements should improve liquidity, which has shown signs of weakening
FSB finalises recommended action on asset management risks
Set of recommendations tackle liquidity, leverage, op risk and securities lending; work on globally systemic designations pushed back until 2019
RBI moves to soak up liquidity generated by cash crisis
Deposits of old banknotes have led to surge in liquidity, which is now showing up as pressure on the bond market
Gulf central banks should act to boost liquidity – IMF report
Improved liquidity assistance frameworks, better forecasting and deeper Islamic liquidity markets would help ease conditions
Fischer: liquidity is mostly adequate but there are problem areas
Fed vice-chair recommends vigilance amid changing market structure, though he says problems are not widespread; SEC chief says she is “deeply concerned” on bond market liquidity
BIS’s Shin links dollar strength to global malaise
Head of research outlines how dollar strength affects leverage globally, causing deviations from covered interest parity and potentially impacting growth and trade
HKMA expands offshore renminbi liquidity scheme
List of banks provided with liquidity for offshore renminbi market-making grows, with extra measures designed to boost transparency
Central Bank of Solomon Islands commits to promoting private sector credit growth
Levels of liquidity “more than adequate”, latest monetary policy review says; central bank to maintain levels of liquidity by continuing to issue bills
Book notes: Connectedness and contagion, by Hal Scott
Scott’s argument on the dangers of contagion has many appealing features, although he may be too eager to hand powers to unelected officials, writes Michael Reddell
Independence, liquidity and a level playing field – yet another impossible trinity?
Jesper Berg warns it will likely be impossible to balance the demands of monetary policy independence, liquidity standards and achieving fairness for all banks
Global sharia standards desirable, but impractical – Lebanon’s el Gemayel
Complete standardisation impractical, but other options are available, says Central Bank of Lebanon’s Joëlle el Gemayel; Islamic banking landscape is shifting
Better swap lines could support global co-operation – BIS’s da Silva
Improving the global network of swaps, particularly between advanced and emerging economies, could create a more stable system, deputy general manager says