Sovereign debt
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
Global custodian of the year: BNY Mellon
The US asset specialist has made strong progress in its effort to offer a seamless overlay of its disparate legacy systems, while also providing improved training to official institutions
RBI’s Acharya tells banks to deal with interest rate risk
Indian banks are vulnerable to changes in yields and have relied on regulatory forbearance for too long, deputy says
German savings banks may buy debt to gain political favour, ECB paper says
Research warns this behaviour increases interdependence between banks and governments
Fed economists tackle question of optimal balance sheet size
Cutting balance sheet would significantly reduce interest rate risk, economists find, as Fed acknowledges lower profits due to interest payments
Mario Draghi confirms Basel III is complete
Governors and heads of supervision grant final approval to the amended Basel III framework, but the parties fail to agree on sovereign asset treatment
Portuguese finance minister named new head of Eurogroup
ESM manager praises Mário Centeno as a “passionate economist”
Stronger growth improves financial conditions in Europe – ECB review
Manufacturing activity and consumer sentiment bolsters growth across the region
SBP welcomes ‘visible change’ in government borrowing
Government’s reduced reliance on borrowing from the central bank has supported monetary policy implementation, the State Bank of Pakistan says
European recovery may be stronger than previously thought
If the great recession and sovereign debt crisis are considered a single shock, “recovery is in line with – or better than – historical patterns”
Swiss bond market contracts despite negative rates – SNB’s Maechler
Shift driven by lower issuance by Swiss government and reduced financing needs of banks
Venezuelan crisis deepens; rating agencies declare default
Russia agrees to restructure $3.15 billion to facilitate repayments to creditors
SNB profits hit record high
Swiss franc’s depreciation and high stock prices fuel the rise in revenues in the first three quarters
The optimal size for central bank balance sheets
As the Fed seeks to reduce the assets on its balance sheets, Charles Goodhart examines the role between monetary and fiscal policy, central bank and debt office, and the optimal size of a central bank’s balance sheet
Bahamian central bank proposes law change to cap government debt holdings
New legal framework for Bahamas central bank would enforce “comprehensive” limits on government debt; holdings of long-term government debt stand at 12.52%
Firms with greater liquidity needs benefit more from higher public debt – research
The positive effect of government debt on industry stems from domestic debt, not external debt, author finds
Sovereign debt crises hit non-tradable sectors harder
A 1% increase in bond spreads is associated with an average decline of 3% in growth of zero-traded industries
Savings and good governance are best policy against natural disasters – IADB
Chile was able to overcome a major earthquake in 2010 without resorting to international funding
Draghi’s ‘whatever it takes’ is not credible – Nobel laureate
Chris Sims says ECB cannot be sure it will be able to stop a run on the euro until it is backed by a central eurozone fiscal authority
Norway’s pension fund grows on rising equities
The world’s largest sovereign wealth fund grows, thanks to European equities, but low rates and oil prices remain long-term challenges
“What would Allan say?”
Central Banking Publications founder Robert Pringle finds pearls of wisdom in his email correspondence with the late Allan Meltzer
Fed paper: corporate bond buying can misallocate capital
Capital misallocation effects can mean corporate bond purchase schemes underperform QE based on sovereign bonds, say economists
Major issues on Greek debt still need resolution, analysts say
Deal between European partners and IMF will still face many difficulties, even after German elections, observers warn
The BoJ’s exit policy and balance sheet risks
The Bank of Japan will need to follow a meticulous sequencing of events as its ‘normalises’ monetary policy, making current concerns about negative equity appear premature