Sovereign debt
BoE paper finds impatience increases austerity costs
Discussion paper finds close link between a country’s time preference and its fiscal multiplier, implying that countries wanting a slower fiscal adjustment face higher costs to austerity
IMF research finds inflation targeting can dampen risk premiums
Working paper suggests inflation targeting reduces a country’s risk premium, although this effect is stronger for emerging markets and where inflation targeting is successful in stabilising prices
IMF sees southern European free-fall begin to slow
Mission chief for Greece says painful adjustment proceeding ‘apace’, although questions raised over potential €9.5 billion funding gap; Fund praises ‘impressive policy effort’ in Portugal
Fed’s latest Beige Book finds post-hurricane rebound
States that bore the brunt of Hurricane Sandy report improved conditions in all but the hardest-hit areas, as ‘modest or moderate’ growth continues; unemployment remains stubborn, however
Irish deputy governor says economy has ‘little safety margin’
Stefan Gerlach says while growth may show a modest recovery this year, even a small shock to market confidence could complicate an exit from the IMF programme
RBI seeks to draw retail investors into government securities
Deputy governor Harun Khan says tailoring government securities to retail investors will help cushion volatility created by institutional and international investors
IMF paper identifies trends in fiscal profligacy
Working paper analyses dataset of countries’ fiscal performance over time, finding an imperfect response to changes in the underlying economy
IMF fears Ireland could still lose access to markets
Eighth review of extended fund facility says Ireland’s newly regained market access is ‘fragile’ and could be lost if European commitments to ESM funding and OMTs are not followed through
Buba’s Weidmann on the virtues of sound finances
Bundesbank president stresses the need for fiscal rectitude in monetary union
Chile’s Vergara draws parallels between LatAm and eurozone crises
Governor of the Central Bank of Chile says Latin America’s sovereign debt crisis of the 1980s has similarities with current situation in eurozone; despite ‘lost decade’, better policies resulted
Bank of Greece upbeat on recovery prospects
Interim 2012 report on monetary policy says ‘tangible’ progress has been made in key sectors, but commentators warn optimism may be unfounded
Euro periphery financial systems still ‘fragile’, reports show
Irish and Portuguese financial stability reports show financial systems have grown stronger in past year, but weaknesses persist
Turkish minutes urge government to maintain discipline
Central Bank of the Republic of Turkey says annual inflation likely to come in lower than previously forecast, but this depends on the government adhering to fiscal commitments
Eurogroup agrees on Greek aid package
Eurozone countries agree on measures to boost Greek debt sustainability alongside a €43.7 billion ($56.5 billion) disbursement from the European Financial Stability Facility
Bernanke steps up pressure for action on fiscal cliff
Fed chairman warns of damaging effects of uncertainty over ‘fiscal cliff’ on the economy; says plan for long-term debt sustainability would reinforce confidence and promote recovery
French debt downgraded as Troika praises Portuguese reforms
France stripped of top credit rating due to weak reform effort and high uncertainty, as Troika praises Portugal for making ‘solid progress’ with economic reforms
BoE survey shows record-level concern about sovereign risk
Record 94% of respondents cite sovereign risk as a concern in the Bank of England’s latest systemic risk survey, but confidence in the UK financial system and funding markets rises
Troika praises Ireland for ‘steadfast’ adherence to programme
Conclusion of eighth programme review says Ireland likely to meet deficit target this year; Portugal by contrast facing ‘strong headwinds’ to fiscal adjustment with 2012 targets beyond reach
Draghi defends OMTs in front of German parliament
ECB president answers questions from Bundestag in a bid to address German fears over effect of outright monetary transactions
Third-quarter figures show Spain still grappling with economic woes
Bank of Spain economic bulletin for the third quarter shows continued weakening of growth and range of other economic indicators; raises possibility government will not meet deficit target this year
IMF says urgent action required in eurozone
Fund’s Global Financial Stability Report highlights progress with reforms in Europe but warns risks have increased since April; says eurozone policy-makers must act quickly to ensure stability
Bond market contagion permanently increased in Emu, says Czech paper
Czech National Bank research investigates increased contagion of sovereign bond markets in European Monetary Union; evaluates impact of rating agencies
Former ECB board members say OMTs are outside central bank’s mandate
Otmar Issing and Jürgen Stark both criticise ECB bond purchase plans in separate interviews; Issing calls political union a ‘dangerous idea’
Ireland unlikely to comply with fiscal compact until 2020
Central Bank of Ireland 'economic letter' estimates it may be 2020 before Ireland complies with the EU fiscal compact’s structural deficit target