6,788 results
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152. China Needs More Stimulus to Boost Growth, PBOC Paper Says.
- Subjects
CENTRAL banking industry ,INDUSTRIAL policy ,STAY-at-home orders ,LOANS ,RENMINBI - Abstract
Keywords: PBCZ@CH; ALLTOP; ASIA; ASIATOP; BUSINESS; CHINA; CORONAVIR; ECOTOP; FRX; GLOBALMACR; GOV; MARKETS; TOP; WORLD; WWTOP; WWTOPAS; WWTOPEU EN PBCZ@CH ALLTOP ASIA ASIATOP BUSINESS CHINA CORONAVIR ECOTOP FRX GLOBALMACR GOV MARKETS TOP WORLD WWTOP WWTOPAS WWTOPEU China needs to roll out more stimulus to boost economic growth as the recovery isn't solid and its momentum showed signs of slowing, according to Financial News, a newspaper backed by the central bank. PBCZ@CH, ALLTOP, ASIA, ASIATOP, BUSINESS, CHINA, CORONAVIR, ECOTOP, FRX, GLOBALMACR, GOV, MARKETS, TOP, WORLD, WWTOP, WWTOPAS, WWTOPEU. [Extracted from the article]
- Published
- 2022
153. Losing the Inflation Anchor.
- Author
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REIS, RICARDO
- Subjects
PRICE inflation ,MARKET prices ,HOUSEHOLD surveys ,CENTRAL banking industry ,RATIONAL expectations (Economic theory) - Abstract
Inflation has an anchor in people’s expectations of what its long run value will be. If expectations persistently change, then the anchor is adrift; if they differ from the central bank’s target, the anchor is lost. This paper uses data on expectations from market prices, from professional surveys, and from the cross-sectional distribution of household surveys to measure shifts in this anchor. The paper’s main application is to the Great Inflation in the United States. The data suggest that the anchor started drifting as early as 1967 and that this could have been spotted well before policymakers noticed it. Other applications using expectations data from Brazil, Turkey, South Africa, the United States in the 1970s, and the United States in 2021 confirm the data’s usefulness to measure the inflation anchor in real time. [ABSTRACT FROM AUTHOR]
- Published
- 2021
154. Development Finance or Financial Accumulation for Asset Managers?: The Perils of the Global Shadow Banking System in Developing Countries.
- Author
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Musthaq, Fathimath
- Subjects
SHADOW banking system ,INSTITUTIONAL investors ,INTERNATIONAL financial institutions ,DEVELOPING countries ,FOREIGN exchange reserves ,GOVERNMENT securities ,NONBANK financial institutions ,CENTRAL banking industry - Abstract
The private finance-led development model, promoted by international financial institutions, has faced a number of challenges. A major criticism is that the model promotes shadow banking, a system vulnerable to cyclical changes in liquidity. I argue that these criticisms do not go far enough because they fail to challenge the dominant understanding of shadow banking as a system of credit intermediation. In this paper, I propose an alternative analytical framework of shadow banking as a system that facilitates high risk-adjusted returns for institutional investors. This framework better clarifies the accommodations emerging markets make to sustain financial flows of which I outline two: (1) the provision of high-yielding financial assets, primarily through the issue of local-currency denominated sovereign bonds; and (2) the liquidity and insurance central banks provide, by drawing on expensive foreign exchange reserves, that enable investors to reap high risk-adjusted returns. The paper argues that rather than facilitating finance (or patient capital) to meet development objectives, a private finance-led model, by promoting the integration of emerging markets into the global shadow banking system, facilitates financial accumulation for global investors. [ABSTRACT FROM AUTHOR]
- Published
- 2021
- Full Text
- View/download PDF
155. What Makes a Successful Scientist in a Central Bank? Evidence From the RePEc Database.
- Author
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Rybacki, Jakub and Serwa, Dobromił
- Subjects
CENTRAL banking industry ,FEDERAL Reserve banks ,INTERNATIONAL financial institutions ,EMERGING markets ,POISSON regression - Abstract
This research analyzes factors affecting the scientific success of central bankers. We combine data from the RePEc and EDIRC databases, which contain information about economic publications of authors from 182 central banks. We construct a dataset containing information about 3312 authors and almost 80,000 scientific papers published between 1965 and 2020. The results from Poisson regressions of citation impact measure (called the h-index) on a number of research features suggest that economists from the U.S. Federal Reserve Banks, international financial institutions, and some eurozone central banks are cited more frequently than economists with similar characteristics from central banks located in emerging markets. Researchers from some big emerging economies like Russia or Indonesia are cited particularly infrequently by the scientific community. Beyond these outcomes, we identify a significant positive relationship between research networking and publication success. Moreover, economists cooperating with highly cited scientists also obtain a high number of citations even after controlling for the size of their research networks. [ABSTRACT FROM AUTHOR]
- Published
- 2021
156. Does the ECB policy of quantitative easing impact environmental policy objectives?
- Author
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Hilmi, Nathalie, Djoundourian, Salpie, Shahin, Wassim, and Safa, Alain
- Subjects
QUANTITATIVE easing (Monetary policy) ,ENVIRONMENTAL policy ,EUROZONE ,GREEN bonds ,BONDS (Finance) ,MONETARY policy ,MONETARY unions ,CENTRAL banking industry - Abstract
The relationship between the environment and climate change on one hand and the financial system, financial regulation and monetary policy on the other is growing in importance. This paper examines the possible impact of the European Central Bank's monetary policy of quantitative easing on the environmental policy of the European Union. Using data from Climate Bonds Initiative, the paper analyses the variation in the amount of "green labelled bonds" issued in the individual member countries of the Eurozone areas, as a function of liquidity inducing monetary policy variables. The paper finds a positive and significant relationship between the two measures. [ABSTRACT FROM AUTHOR]
- Published
- 2022
- Full Text
- View/download PDF
157. Monetary Policy Responses to Crude Oil-Price Shocks: The Case of Selected Central Banks.
- Author
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Mwange, Austin and Meyiwa, Ayanda
- Subjects
MONETARY policy ,PETROLEUM ,CENTRAL banking industry ,FISCAL policy ,PRICES - Abstract
Since the establishment of Central Banks, they have been responsible for their national economic stabilization. This paper explores how selected banks have responded to oil price shocks. Firstly, the paper provides a critical analysis of the effects of commodity price shocks using a version of the three equations – the New Keynesian model. Secondly, the paper chronologically investigates past responses to shocks from five central banks, emphasizing similar and extreme responses and their success. Lastly, the paper utilizes the historical analysis to formulate a recommended response for central banks today. The major outcome of this study is the culmination of a recommendation that proactively implementing contractionary monetary policy alongside expansionary fiscal policy, using conventional and unconventional policies is the most effective. [ABSTRACT FROM AUTHOR]
- Published
- 2022
- Full Text
- View/download PDF
158. Determinants of nonperforming loans after recapitalization in the Nigerian banking industry: Does competition matter?
- Author
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Bolarinwa, Segun Thompson and Akinlo, Anthony Enisan
- Subjects
NONPERFORMING loans ,BANKING industry ,BANK loans ,RECAPITALIZATION ,CENTRAL banking industry ,MARKET power - Abstract
This paper examines the effect of competition on nonperforming loans in the Nigerian banking industry between 2011 and 2018 using the system generalized method of moments. The findings establish the competition‐stability hypothesis in the Nigerian context. The interaction between competition and bank size/capitalization has a positive and significant effect on nonperforming loans. These results showed that low competition increased nonperforming loans in the Nigerian banking industry while bank size and capitalization enhanced competition to increase nonperforming loans. Also, bank size/capitalization are complementary for addressing nonperforming loans. The paper recommends that the Central Bank of Nigeria (CBN) regulates the market power of the five largest banks in the industry to address the adverse effects of competition on mounting nonperforming loans in the Nigerian banking industry. [ABSTRACT FROM AUTHOR]
- Published
- 2022
- Full Text
- View/download PDF
159. Financialisation of monetary policy in a dollarised economy: the case of Georgia.
- Author
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Eradze, Ia
- Subjects
MONETARY policy ,FINANCIALIZATION ,FOREIGN investments ,INFLATION targeting ,FOREIGN exchange rates ,CAPITAL movements ,PUBLIC debts ,CENTRAL banking industry - Abstract
This paper examines the financialisation of monetary policy—articulated as inflation targeting—and provides insight on the implications this phenomenon has on dollarised economies. The analysis provided has been developed via a thorough investigation into these dynamics in the country of Georgia: a neoliberal and foreign direct investment (FDI)-led accumulation regime with an open capital account, where the inflow of foreign capital led to enhanced lending by foreign-owned banks in foreign currency and encouraged persistent dollarisation. This paper contributes to the literature on the role of foreign capital in developing economies, and the volatilities of these economies in terms of overvalued exchange rates, capital flight and rise of public debt. This paper concludes that the financialisation of monetary policy has encouraged the process of dollarisation in Georgia. The use of inflation targeting was an ineffective strategy for Georgia's dollarised economy due to the primacy of price stability over currency stability, the reduction of the capacity of Georgia's central bank as well as increased economic influence of foreign-owned commercial banks. [ABSTRACT FROM AUTHOR]
- Published
- 2022
- Full Text
- View/download PDF
160. Doubly heterogeneous monetary spillovers.
- Subjects
CENTRAL banking industry ,VOLATILITY (Securities) ,BOND prices ,FINANCIAL markets ,INTERNATIONAL markets - Abstract
Monetary spillovers are heterogeneous in two ways: how central banks generate them and how countries receive them. First, the Fed is mostly unique in its ability to affect other countries' financial markets, among ten developed central banks. This is noteworthy given the lack of data on other central banks' spillovers. This paper makes public a novel data set of these ten central banks' monetary shocks to support future research. Second, the Fed affects recipient countries in different ways, with the bonds and currencies of countries with high‐interest rates reacting differently than those of low‐rate countries. This can help shed light on theories around the Fed's spillovers, and this paper demonstrates how the exact pattern is inconsistent with models in which developed central banks react to the Fed. [ABSTRACT FROM AUTHOR]
- Published
- 2022
- Full Text
- View/download PDF
161. Term Structure, Forecast Revision, and the Signaling Channel of Monetary Policy.
- Author
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Zhang, Donghai
- Subjects
MONETARY policy ,YIELD curve (Finance) ,BAYES' theorem ,CENTRAL banking industry ,INTEREST rates ,FORECASTING - Abstract
Monetary policy shocks affect interest rates at long horizons (10 years or more). Furthermore, the private sectorâs real GDP forecasts are revised upward in response to a monetary tightening. These facts challenge the prevailing theories in academic and policy circles. In this paper, I propose a micro-founded model to rationalize those facts, based on the signaling channel of monetary policy. I consider a framework where the central bank has private information about future economic conditions. Agents update their beliefs according to Bayes' theorem. Policy actions play a signaling role, and may therefore rationalize the above empirical findings. [ABSTRACT FROM AUTHOR]
- Published
- 2022
- Full Text
- View/download PDF
162. Bank funding costs and solvency.
- Author
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Arnould, Guillaume, Avignone, Giuseppe, Pancaro, Cosimo, and Żochowski, Dawid
- Subjects
INTEREST rates ,CENTRAL banking industry ,BANK deposits ,FINANCIAL risk ,BONDS (Finance) ,SOVEREIGN risk ,MONETARY policy - Abstract
This paper investigates the relationship between bank funding costs and solvency for a large sample of euro area banks using two proprietary ECB datasets for both wholesale funding costs and deposit rates. In particular, the paper studies the relationship between bank solvency, on the one hand, and senior bond yields, term deposit rates and overnight deposit rates, on the other. The analysis finds a significant negative relationship between bank solvency and the different types of funding costs. It also shows that this relationship is non-linear, namely convex, for senior bond yields and term deposit rates. It also identifies a positive realistic solvency threshold beyond which the effect of an increase in solvency on senior bond yields becomes positive. The paper also finds that senior bond yields are more sensitive to a change in solvency than deposit rates. Among the deposit rates, the interest rates of the overnight deposits are the least sensitive. Banks' asset quality, profitability and liquidity seem to play only a minor role in driving funding costs while the ECB monetary policy stance, sovereign risk and financial markets uncertainty appear to be material drivers. [ABSTRACT FROM AUTHOR]
- Published
- 2022
- Full Text
- View/download PDF
163. Developments and Implications of Central Bank Digital Currency: The Case of China e‐CNY.
- Subjects
ELECTRONIC money ,INTERNATIONAL finance ,CENTRAL banking industry ,ONLINE banking ,BANKING industry ,COOPERATIVE banking industry ,CRYPTOCURRENCIES ,RENMINBI - Abstract
China has been both active and cautious in developing a central bank digital currency (CBDC). China CBDC has been in research and development since 2014. The process speeded up in 2019. It is currently at the stage of expanding real field experiments. Residents in 11 areas can open e‐wallets linked to nine major banks. It is centralized digital cash designed to gradually replace traditional paper cash and coins (M0). It will be supported by the traditional double‐layer banking system. It is not blockchain based at issuance but is technology neutral in distribution. Internet and technology companies may join commercial banks in distributing the China CBDC. In the short run, the China CBDC will help improve domestic financial monitoring and policy implementation. In the long run, it may play a role in the RMB's internationalization or even the international monetary system's evolution. [ABSTRACT FROM AUTHOR]
- Published
- 2022
- Full Text
- View/download PDF
164. Big Data in Asian Central Banks.
- Author
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Cornelli, Giulio, Doerr, Sebastian, Gambacorta, Leonardo, and Tissot, Bruno
- Subjects
BIG data ,CENTRAL banking industry ,INTERNATIONAL cooperation ,INTERNATIONAL banking industry - Abstract
The present paper reviews the use of big data in Asian central banks, leveraging on a survey conducted by the Irving Fischer Committee on Central Bank Statistics (IFC) of the Bank for International Settlements. It reveals four main insights. First, Asian central banks define big data in an encompassing way. Second, they show higher interest in big data, including at the senior policy level. Third, big data already supports a wide range of tasks. Fourth, big data poses new challenges and increases the need for international policy cooperation, especially to make use of payments data and promote innovative technological solutions. [ABSTRACT FROM AUTHOR]
- Published
- 2022
- Full Text
- View/download PDF
165. Central Bank Digital Currency in Historical Perspective: Another Crossroad in Monetary History.
- Author
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Bordo, Michael D.
- Subjects
ELECTRONIC money ,MONETARY policy ,CENTRAL banking industry ,BITCOIN ,MONETARY systems ,INTERNATIONAL finance ,DIGITAL technology - Abstract
Digitalization of money is a crossroad in monetary history. Advances in technology have led to the development of new forms of money: virtual (crypto) currencies like bitcoin, stable coins like libra/diem, and central bank digital currencies (CBDC) like the Bahamian sand dollar. These innovations in money and finance resonate with earlier shifts in monetary history: 1) the shift in the eighteenth and nineteenth centuries from commodity money (gold and silver coins) to convertible fiduciary money and inconvertible fiat money; 2) the shift in the nineteenth and twentieth centuries from central bank notes to a central bank monopoly; and 3) the evolution since the seventeenth century of central banks and the tools of monetary policy. This paper makes the case for CBDC through the lens of monetary history. The bottom line is that the history of transformations in monetary systems suggests that technical change in money is inevitably driven by the financial incentives of a market economy. Government has always had a key role in the provision of outside money, which is a public good. Government has also regulated inside money provided by the private sector. This held for fiduciary money and will likely hold for digital money. CBDC could make monetary policy more efficient, and it could transform the international monetary and payments systems. [ABSTRACT FROM AUTHOR]
- Published
- 2022
- Full Text
- View/download PDF
166. SIZE OF FISCAL POLICY INSTRUMENTS USED DURING COVID-19 CRISIS AND POSSIBLE FUTURE CHALLENGES.
- Author
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Rimsevics, Ilmars
- Subjects
FISCAL policy ,COVID-19 pandemic ,ECONOMIC stimulus ,CENTRAL banking industry ,MONETARY policy ,PUBLIC debts ,ECONOMIC recovery - Abstract
COVID-19 pandemic arrived unexpected. Full blown twin (epidemiological and economic) crisis travelled the world. Policy makers had to come up quickly with containment and mitigation measures of pandemic and fiscal and economic stimulus measure activities in order to reduce the damages created by the crisis. Governments prepared sizable fiscal stimulus packages in order to cushion the dramatic economic consequences and central banks acted pre-emptively and provided extra liquidity with different Quantitative easing programs and financial stability support measures for the financial sector. Paper discusses evolution of different crises management scenarios during several previous crises. The economic crises of such magnitude requires fast and coordinated monetary and fiscal policy actions. Just assigning massive amounts of money through various channels of economy to stimulate economic activity does not guarantee success and the immediate recovery. When monetary policy is close to or at the zero-lower bound (ZLB), the role of the fiscal policy with all its instruments becomes more important and requires much closer analysis of the use of instruments in the tool box. The problem arises with diminishing fiscal space and future cost of resources. Thus, the aim of this paper is to analyze the size, the role and the use of automatic stabilizers, semi-automatic stabilizers and various fiscal discretionary measures in the selected OECD countries during the crisis. Paper concludes that despite huge and unprecedented amounts of resources allocated through various fiscal instruments, there is only small correlation between the size of the various fiscal stimulus instruments, including automatic stabilizers, used and the speed of recovery and attainment of the output of pre-crisis levels. Since substantial fiscal space has been used up in the first two years of the COVID-19 crisis and ultimate amount of the fiscal resources is limited more thorough analysis is required to determine the factors, which shape faster economic recovery. Therefore, continuing spending huge amounts of fiscal resources and reducing the fiscal space further every year, without recognizing the main reasons of slower recovery, could be challenging in the future and would require tough fiscal and structural reforms measures. [ABSTRACT FROM AUTHOR]
- Published
- 2022
167. When Central Bankers' Words Spoke Louder than Their Actions.
- Author
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Maas, Steve
- Subjects
CENTRAL banking industry ,GOVERNMENT securities ,INVESTORS ,CORPORATE bonds ,AGGREGATE demand ,ASSET backed financing - Abstract
The article discusses two separate research papers. The first paper examines the factors that influence changes in household asset allocation patterns, finding that three factors (long-term equity risk premium, credit premium, and municipal bond premium) explain 81% of the variation in rebalancing across asset classes. The second paper analyzes the impact of central bank announcements on interest rates and exchange rates during the COVID-19 pandemic. It finds that "whatever-it-takes" announcements had a greater effect on lowering bond yields compared to size-limited announcements, and that open-ended announcements had a significant impact on longer-term yields. The researchers caution that central banks cannot solely rely on whatever-it-takes policies in future crises. Additionally, the article briefly mentions another research paper that examines the effects of increased immigration enforcement on public safety, specifically among Hispanics. The study finds that the Secure Communities program led to a decrease in crime reporting among Hispanics and an increase in victimization rates. [Extracted from the article]
- Published
- 2024
168. The continuity of the architectural output of the new Iraqi Central Bank building for the architect (Zaha Hadid) according to Jacobson's communication theory.
- Author
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Jafar, Ali Kareem, Hassan, Nada Abdulhussein, and Al-Yusof, Ibrahim Kadhum Jawad
- Subjects
CENTRAL banking industry ,IRAQIS ,ARCHITECTS ,CONTINUITY ,COMMUNITIES ,ARCHITECTURAL designs - Abstract
This paper focuses on the concept of communicativeness in the architectural production between the designer, the product and the recipient according to Jacobson's1 theory of communication, as the concept of communicativeness is one of the contemporary and important concepts in reading the architectural production, which has a great role in generating a set of readings of the architectural product represented by the designer's vision on the one hand and culture The recipient on the other hand, and thus a statement of the role of communicative and its impact on the architectural production and on the urban context for the recipient. This paper presents a brief objective study on the new Iraqi Central Bank building, which was designed by the late architect (Zaha Hadid), whether it has achieved continuity with the urban context in it despite the difference of intellectual current of the designer from the urban architectural context prevailing in the region (Iraq), where the study organized a set of questions (a questionnaire) targeting the elite (architects) in the community (the study sample), indicating the role of communication between the product and the recipient. [ABSTRACT FROM AUTHOR]
- Published
- 2023
- Full Text
- View/download PDF
169. The European Central Bank's Monetary Policy during Its First 20 Years.
- Author
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HARTMANN, PHILIPP and SMETS, FRANK
- Subjects
MONETARY policy ,CENTRAL banking industry ,EUROZONE ,ECONOMIC recovery ,PUBLIC debts - Abstract
On June 1, 2018, the European Central Bank (ECB) celebrated its 20th anniversary. This paper provides a comprehensive view of the ECB's monetary policy over these two decades. The first section gives a chronological account of the macroeconomic and monetary policy developments in the euro area since the adoption of the euro in 1999, going through four cyclical phases "conditioning" ECB monetary policy. We describe the monetary policy decisions from the ECB's perspective and against the background of its evolving monetary policy strategy and framework. We also highlight a number of the key, critical issues that were the subject of debate. The second section contains various assessments. We analyze the achievement of the price stability mandate and developments in the ECB's credibility, and we also investigate the ECB's interest rate decisions through the lens of a simple empirical interest rate reaction function. Finally, we present the ECB's framework for thinking about nonstandard monetary policy measures and review the evidence on their effectiveness. One of the main themes of the paper is how the ECB utilized its monetary policy to respond to the challenges posed by the European twin financial and sovereign debt crises and the subsequent slow economic recovery, making use of its relatively wide range of instruments, defining new ones where necessary, and developing the strategic underpinnings of its policy framework. [ABSTRACT FROM AUTHOR]
- Published
- 2018
- Full Text
- View/download PDF
170. Money creation, debt, and justice.
- Author
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Dietsch, Peter
- Subjects
BANK loans ,INTERBANK market ,CENTRAL banking industry ,DISTRIBUTIVE justice ,PRIVATE banks ,INCOME inequality - Abstract
Theories of justice rely on a variety of criteria to determine what social arrangements should be considered just. For most theories, the distribution of financial resources matters. However, they take the existence of money as a given and tend to ignore the way in which the creation of money impacts distributive justice. Those with access to collateral are favoured in the creation of credit or debt, which represents the main form of money today. Appealing to the idea that access to credit confers freedom, and that inequalities in this freedom are morally arbitrary, this article shows how the advantage to those with collateral plays out in different ways in today's economy. The article identifies several forms of bias inherent in money creation, and its subsequent destruction: loans from commercial banks to individuals and corporations, interbank lending, lending from central banks to commercial banks, and selective bail-outs by central banks. These are not mere inequalities: they are unjust since alternative designs of the financial architecture exist that would significantly reduce them. The paper focuses on one possible reform with the potential to address several of the types of bias identified, namely the separation of money creation from private bank credit. [ABSTRACT FROM AUTHOR]
- Published
- 2021
- Full Text
- View/download PDF
171. THE INTELLECTUAL IDEAS INSIDE CENTRAL BANKS: WHAT'S CHANGED (OR NOT) SINCE THE CRISIS?
- Author
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Windsor, Callan
- Subjects
CENTRAL banking industry ,GLOBAL Financial Crisis, 2008-2009 ,MACROECONOMIC models ,COMPUTATIONAL linguistics - Abstract
I explore how the intellectual ideas inside central banks have shifted over the first two decades of the new century. To do this I collect every research paper published by advanced economy central banks and examine them using tools from computational linguistics. The analysis points to a shift in the intellectual focus, from a relatively macroeconomic perspective towards a less aggregated view. In part, these changes seem to reflect lessons from the 2008 financial crisis – for example, that macroeconomic models can only get you so far and that microeconomic data are useful for teasing out the causes of aggregate fluctuations. There has been an increase in the amount of research dedicated to the banking and household sectors and a reduction in the amount of intellectual effort invested in modelling the macroeconomy – though some of these shifts had already begun before the crisis. Consistent with this, the similarity of central banking research to that published in top macroeconomic journals has been widening since the crisis. [ABSTRACT FROM AUTHOR]
- Published
- 2021
- Full Text
- View/download PDF
172. A Rolling Window Causality Approach Toward Inflation and Inflation Expectations: An Application from Turkey.
- Author
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GEYİK, Ertuğrul Üstün
- Subjects
PRICE inflation ,INFLATION targeting ,ECONOMIC expectations ,CENTRAL banking industry ,CAUSALITY (Physics) - Abstract
Expectations for the economic policymakers has been an important economic phenomena especially after 1980's. To control inflation via anchors like inflation targeting, creating Central Bank credibility are all methods to control the expectations. After 15 years of inflation targeting in Turkey this paper is centered upon the causality between inflation and expectations but not just in a static but also in a dynamic manner where a rolling window approach is used to find out the changing causality within periods. [ABSTRACT FROM AUTHOR]
- Published
- 2021
173. Open market operations and associated movements of the federal funds rate during the week prior to target changes.
- Author
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Nishiyama, Yasuo
- Subjects
OPEN market operations ,CENTRAL banking industry ,MONETARY policy ,FEDERAL funds market (U.S.) ,FEDERAL Reserve banks - Abstract
This paper estimates the conduct of open market operations during the week prior to a change in the federal funds target rate over 1994-2005. The paper finds evidence that the Federal Reserve conducted either no or partial accommodation most of the time when target changes were plus/minus 25 basis points, whereas it conducted anti-accommodation when target changes were plus/minus 50 basis points or larger. Observed, and well-documented, movements of the federal funds rate-away from the existing target level and toward an expected new target level during the week prior to a target change-are consistent with these open market operations. An exception is the 1994-2001 period during which the Federal Reserve most likely conducted complete accommodation, thereby keeping the federal funds rate at the existing target, when target changes were minus 25 basis points. [ABSTRACT FROM AUTHOR]
- Published
- 2017
- Full Text
- View/download PDF
174. Comments and Discussion.
- Subjects
CENTRAL banking industry ,GOVERNMENT policy ,BALANCE of trade ,ECONOMIC reform ,MONETARY policy ,FISCAL policy - Abstract
The article offers commentary and discussion of the journal report "When Does Policy Reform Work? The Case of Central Bank Independence" by Daron Acemoglu, Simon Johnson, Pablo Querubín, and James A. Robinson. The author states that the paper handles the significant topic about the effectiveness of policy reforms and whether central bank independence curbs inflation and reduces unemployment. The article also studies how politics affects monetary policy, and decides if the economic models suggested by Acemoglu and his co-authors concerning central banking accurately take into account inflation, fiscal deficits, and central bank reform.
- Published
- 2008
175. Cheap dollar commercial paper entices Asian central banks.
- Subjects
COMMERCIAL paper issues ,CENTRAL banking industry ,INVESTORS ,DEALS ,INVESTMENTS - Abstract
The article focuses on the status of the global commercial paper (CP) market, as of November 3, 2006. Asian central banks took advantage of cheap levels in the five month part of the curve while many other European CP investors stayed out of the market altogether. In addition to the attractive levels, some dealers believed the deals were driven at least in part by a need to invest idle funds.
- Published
- 2006
176. BITCOIN TRANSACTIONS.
- Author
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Franjić, Siniša
- Subjects
BITCOIN ,ELECTRONIC money ,CRYPTOCURRENCY exchanges ,CENTRAL banking industry ,COMPUTER security - Abstract
Bitcoin is digital money, created and stored electronically. Bitcoin is not printable and is not controlled by anyone. It is produced by numerous people using computers all over the world using software that solves mathematical problems. Bitcoin is the first example of such a currency called cryptocurrency. Given that this is just the beginning of the digital money revolution, Bitcoin is the easiest to explain with the classic evolution of today's currencies through gold. Bitcoin was created as a product of the idea of software developer Satoshi Nakamoto; electronic payment based on mathematical evidence. His idea was to create a currency without central government, with electronic transmission, with very little or no transaction cost. Because of this, no one issues Bitcoin. Bitcoin is not physically issued in the shadow of central banks, where people cannot count it and where banks set their rules. The aim of this paper is to highlight the latest scientific knowledge regarding the use of Bitcoin in practice, but also to highlight the negative side effects. In this paper, author used Desk analysis which enabled him presented conclusions. Since Bitcoin transactions represent a new form of business, it didn't take long to see the misuses occur. Therefore, a permanent investment in all forms of computer security is required. [ABSTRACT FROM AUTHOR]
- Published
- 2020
177. Buttonwood paper tigers.
- Subjects
- *
STOCK exchanges , *CENTRAL banking industry , *INTEREST rates , *MONETARY policy - Abstract
The article reports on the stock market performance of India. It mentions that country's Nifty so and Sensex indices reached record highs at the end of November, and as to many fund managers desperate for diversification, India looks the most promising alternative. It also mentions that the central bank has been forced to raise interest rates in defence of the rupee impacting its domestic monetary policy.
- Published
- 2022
178. Global Era of Negative Yields Is Ending as Japan Note Tops Zero.
- Author
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Kondo, Masaki and Reynolds, Garfield
- Subjects
INTEREST rates ,MUNICIPAL bonds ,YIELD curve (Finance) ,BONDS (Finance) ,CENTRAL banking industry ,MONETARY policy ,PAPER money - Abstract
"We therefore believe that the next policy decision the BOJ takes will likely be a major one - such as changing long-/short-term policy rate targets or terminating yield curve control altogether." (Bloomberg) -- Japan's two-year yield rose above zero for the first time since 2015, bringing the global era of negative yields closer to an end. [Extracted from the article]
- Published
- 2022
179. Discretely Distributed Scheduled Jumps and Interest Rate Derivatives: Pricing in the Context of Central Bank Actions.
- Author
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da Silva, Allan Jonathan and Baczynski, Jack
- Subjects
CENTRAL banking industry ,DISTRIBUTION (Probability theory) ,PRICES ,ECONOMIC impact ,CHARACTERISTIC functions ,INTEREST rates ,BOND prices - Abstract
Interest rate dynamics are influenced by various economic factors, and central bank meetings play a crucial role concerning this subject matter. This study introduces a novel approach to modeling interest rates, focusing on the impact of central banks' scheduled interventions and their implications for pricing bonds and path-dependent derivatives. We utilize a modified Skellam probability distribution to address the discrete nature of scheduled interest rate jumps and combine them with affine jump-diffusions (AJDs) in order to realistically represent interest rates. We name this class the AJD–Skellam models. Within this class, we provide closed-form formulas for the characteristic functions of a still broad class of interest rate models. The AJD–Skellam models are well-suited for using the interest rate version of the Fourier-cosine series (COS) method for fast and efficient interest rate derivative pricing. Our methodology incorporates this method. The results obtained in the paper demonstrate enhanced accuracy in capturing market behaviors and in pricing interest rate products compared to traditional diffusion models with random jumps. Furthermore, we highlight the applicability of the model to risk management and its potential for broader financial analysis. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
180. Central Bank Digital Currency as a New Form of Money.
- Author
-
Nieborak, Tomasz
- Subjects
ELECTRONIC money ,CENTRAL banking industry ,FINANCIAL inclusion ,MONETARY policy ,FISCAL policy - Abstract
The possibility of introducing another form of official money, the Central Bank Digital Currency (CBDC), recognised by legislation, has long been discussed worldwide. This paper aims to analyse the advantages and disadvantages of such a solution, as well as to highlight the challenges facing legislatures about the possibility of legalising digital currency and, above all, protecting the rights and freedoms of citizens participating in the process. Due to its technological nature, CBDC is characterised by a much lower level of anonymity than conventional cash, which is often presented as a disadvantage. However, an analysis of this solution seems to weigh in favour of its advantages. One of them is the possibility of using CBDCs to support the process of financial inclusion referred to in the United Nations document Transforming our world: The 2030 Agenda for Sustainable Development. This is an important subject of academic research that can be carried out under the doctrine of financial-market law. Undoubtedly, this matter also has an increasing impact on the practice of financial-market functioning and fiscal and monetary policy decisions. In particular, financial law plays a key role in solving socioeconomic problems and is becoming an instrument for achieving the goals set by the United Nations. The research subject of CBDC is innovative and exploratory, as money, no matter how it is perceived, is, has been and will continue to be an instrument to change the world for the better. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
181. Stochastic Volatility Models with Skewness Selection.
- Author
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Martins, Igor and Freitas Lopes, Hedibert
- Subjects
STOCHASTIC models ,INTEREST rates ,BONDS (Finance) ,RETURN on assets ,CENTRAL banking industry - Abstract
This paper expands traditional stochastic volatility models by allowing for time-varying skewness without imposing it. While dynamic asymmetry may capture the likely direction of future asset returns, it comes at the risk of leading to overparameterization. Our proposed approach mitigates this concern by leveraging sparsity-inducing priors to automatically select the skewness parameter as dynamic, static or zero in a data-driven framework. We consider two empirical applications. First, in a bond yield application, dynamic skewness captures interest rate cycles of monetary easing and tightening and is partially explained by central banks' mandates. In a currency modeling framework, our model indicates no skewness in the carry factor after accounting for stochastic volatility. This supports the idea of carry crashes resulting from volatility surges instead of dynamic skewness. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
182. Liquidity Requirements and Central Bank Interventions During Banking Crises.
- Author
-
Robatto, Roberto
- Subjects
BANKING industry ,CENTRAL banking industry ,LIQUIDITY (Economics) ,BANK liquidity ,PRICES - Abstract
This paper evaluates liquidity requirements and public liquidity injections in the context of financial crises, using a model that includes near-money assets. Some key effects are transmitted through liquidity premia and the price of liquid assets, producing a heterogeneous impact that depends on an agent's holdings of liquid assets. In addition, some agents prefer policies that do not fully relax their liquidity constraints because these policies are associated with higher prices. Liquidity requirements and liquidity injections have the opposite impact on liquidity premia and combining them leads to Pareto improvements that cannot be achieved by each policy separately. This paper was accepted by Gustavo Manso, finance. Funding: This work was supported by the Wisconsin Alumni Research Foundation. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2023.4737. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
183. Cryptocurrency, Security, and Financial Intermediation.
- Author
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GLENN, NICHOLAS and REED, ROBERT
- Subjects
CRYPTOCURRENCIES ,ELECTRONIC money ,MONETARY policy ,BANKING industry ,CENTRAL banking industry ,CRYPTOCURRENCY exchanges ,FINANCIAL security ,INTERMEDIATION (Finance) - Abstract
In recent years, the use of cryptocurrencies has increased. As these currencies continue to play a larger role, they eventually will be an important component of banking system activity. Moreover, in addition to the standard role of financial intermediaries to facilitate lending, intermediaries can be valuable firms that help provide safekeeping of tokens. The objective of this paper is to demonstrate these important functions in a microfounded model of monetary exchange. Furthermore, we also consider the possibility that central banks issue their own digital currencies that may affect the level of intermediation in the private banking system. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
184. "Go green" – evaluating the roles of environmental concerns, environmental social norms and green technology in fostering pro-green banking behaviors.
- Author
-
Ashraf, Mohammad Ali
- Subjects
GREEN technology ,CENTRAL banking industry ,SOCIAL norms ,MOBILE banking industry ,CONTROL (Psychology) ,STRUCTURAL equation modeling - Abstract
Purpose: The purpose of this paper is to evaluate the relationship between bankers' perspectives and their pro-green banking behaviors (i.e. intentions). Specifically, how do bankers' perspectives on environmental concerns, environmental normative structure and green technology affect their intentions toward G-banking activities? Design/methodology/approach: A theoretical framework of the theory of bounded rational planned behavior (TBRPB) as its foundation was established. Using measurement scales to measure different aspects of environmental concern, environmental normative structure, green technology, attitudes, perceived behavioral control and subjective norms, a survey instrument was developed to examine the various associations implied by the model of TBRPB. Data were collected from the bankers of selected commercial banks in Bangladesh following the random sampling procedure. The data were analyzed using the partial least square structural equation modeling technique. Findings: Findings indicate that all of the predictors appear to be robust in predicting the G-banking intention of the sampled bankers in Bangladesh. The results also show that attitudes, subjective norms and perceived behavioral control have significant mediating effects toward bankers' bounded rational G-banking intention. Research limitations/implications: There are a few limitations in the study. First, the study considers environmental concerns as an antecedent of the attitude of bankers toward G-banking activities. Future studies can explore other variables related to environmental problems to study G-banking adoption and practices. Second, this study only considers the private conventional bankers as respondents to the survey to assess G-baking intention. In the future, other types of bankers, such as Islamic bankers and public banks' bankers could be included in the survey to explore G-banking practices. Finally, this research has been done in a developing country-context. Practical implications: In this study, environmental concerns of bankers appeared to be highly significant predictors to influence their attitudes toward bounded rational G-banking intention. Similarly, the social normative structure also appears to be a robust antecedent of subjective norms to influence bounded rational G-banking intention of respondent bankers. Finally, green technology or bakers' personal and skill-related ability to control bounded rational G-banking intention also appeared to be a strongly significant predictor of green banking activities. All this evidence implies that respondent bankers in the sample responded positively to provide their positive intention toward G-banking activities based on their environmental concern. Social implications: Important social implication of the current study is G-banking practices can help reduce carbon emissions and other pollutants which would enrich overall environmental sustainability and ecological conditions. Originality/value: Few studies are directed on G-banking perspective in Bangladesh. This research is one of the empirical studies which will certainly add values for the clients, institutions and policymakers in banking paradigm. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
185. THE UNFORESEEN RESULTS OF UNCONVENTIONAL MONETARY DOMINANCE.
- Author
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KHIDASHELI, MIRZA
- Subjects
ECONOMIC recovery ,CENTRAL banking industry ,FINANCIAL statements ,MONETARY policy ,FINANCIAL crises - Abstract
This empirical study investigates the implications of the substantial size of central banks’ balance sheets and the potential risks of their gradual normalization. Following the global financial crisis of 2008, central banks worldwide implemented unprecedented monetary stimulus measures, including large-scale asset purchases and unconventional policy tools like quantitative easing (QE). As a result, central bank balance sheets expanded significantly, reaching historically unprecedented levels in size and composition. While these measures played a crucial role in stabilizing financial markets and supporting economic recovery, concerns have arisen regarding the eventual reduction of these balance sheets and the possibility of disruptive market dynamics. This research examines the challenges and risks of normalizing central bank balance sheets. Furthermore, it explores the potential occurrence of “hard landing” scenarios, where sudden reductions in balance sheets could trigger financial market turmoil and economic downturns. By analyzing historical precedents and theoretical frameworks, this paper offers valuable insights into the intricate relationship between central bank balance sheets and the dynamics of financial markets. It provides policymakers and market participants with valuable perspectives on navigating the path toward monetary policy normalization. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
186. Digital Money in the Indian Context: An In-depth Exploration of its Evolution, Implications, and Future Prospects within the Framework of Central Bank Digital Currency.
- Author
-
Keshav, August and Sinha, Ashish Ranjan
- Subjects
ELECTRONIC money ,ONLINE banking ,CENTRAL banking industry ,HIGH technology industries ,INTERNATIONAL banking industry ,BIOELECTRONICS - Abstract
This study conducts a thorough investigation of digital Money in the distinctive context of India, clarifying its development, consequences, and future possibilities, specifically in relation to Central Bank Digital Currency (CBDC), analyzing its poten tial in the Indian context, its crucial role in the current digital revolution, and the advantages it offers to our country, enterprises, and various user groups.The study proposes aligning our economy with the ongoing digital transition in the global technology scene. In an intangible domain characterized by inexorable advancement, the shift towards a digital economy becomes essential to enhancing our worldwide position. This research, conducted as an exploratory study, utilizes ideas derived from current literature, case studies, books, and electronic resources. this comprehensive approach offers a clear understanding of key aspects of digital money, such as the idea of blockchain, its many forms and sectors, including wholesale and retail, and the examination of real-world applications in different nations. The study examines investigating phenomena such as initial coin offers (ICOs) and the revolutionary possibilities of Central Bank Digital Currency (CBDC) and examines important literature issued by the Reserve Bank of India, the Bank of England, and existing works on centrally b acked currency, as well as by the Bank for International Settlements (BIS). The data is enhanced through documentary analysis. The article concludes with a detailed and thoughtful discussion, providing valuable ideas and outlining potential future paths. As a result, it is essential to thoroughly categorize user groups for virtual currencies, especially those that have central bank support. this study provides a comprehensive grasp of the complex processes surrounding digital money and its potential to revolutionize the Indian socio-economic system. It is a significant resource for policymakers, industry experts, and researchers. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
187. Macroeconomic impact of the supply shock during COVID-19 pandemic in India.
- Author
-
Sharma, Apica and Sachdeva, Paras
- Subjects
COVID-19 pandemic ,AUTOREGRESSIVE models ,PRICE inflation ,COVID-19 ,CENTRAL banking industry - Abstract
Purpose: The study focuses on examining the impact of the supply shock on the Indian macroeconomic variables during the COVID-19 period. Design/methodology/approach: Time-varying factor augmented vector autoregressive model has been employed to study the asymmetry in transmission of supply shock on Indian economy during pre- and post-COVID-19 times. Findings: The authors find that with supply shock, retail food inflation outpaced in COVID-19 times. Production levels reported by IIP fell to abysmally low levels in the post-COVID-19 times when the economy stalled. The liquidity stimulus provided by the central bank led to the negative response of policy rates to the supply shocks during the COVID-19 times. Originality/value: The study stands novel in examining the impact of COVID-19 pandemic on Indian economy through the lenses of asymmetric transmission of supply shock during pre- and post-COVID-19 times. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
188. How optimal is Ghana's single-digit inflation targeting? An assessment of monetary policy effectiveness in Ghana.
- Author
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Amoatey, Richard, Ayisi, Richard K., and Osei-Assibey, Eric
- Subjects
INFLATION targeting ,MONETARY policy ,CENTRAL banking industry ,PRICE inflation ,REGRESSION analysis - Abstract
Purpose: The purpose of this study is twofold. First, to estimate an optimal inflation rate for Ghana and second, to investigate factors that account for the differences between observed and target inflation. Design/methodology/approach: The paper explored the questions within two econometric frameworks, the Autoregressive Distributed Lag (ARDL) and Threshold Regression Models using data spanning the period 1965–2019. Findings: The study estimated a range of 5–7% optimal inflation for Ghana. While this confirms the single-digit inflation targeting by the Bank of Ghana, the range is lower than the central bank's band of 6–10%. The combined behaviours of the central bank, banks and external outlook influence inflation target misses. Practical implications: The study urges the central bank to continue pursuing its single-digit inflation targeting. However, it implies that there is still room for the Bank to further lower the current inflation band to achieve an optimal outcome on growth and welfare. Again, the Bank should commit to increased transparency and accountability to enhance its credibility in attaining the targeted inflation. Originality/value: The study is one of the first attempts in Africa in Ghana to estimate an optimal inflation target and investigate the underlying factors for deviation from the targets. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
189. South African Central Bank Seeks Reference Rate Debate Feedback.
- Author
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Bull, Alister
- Subjects
CENTRAL banking industry ,TERM loans - Abstract
(Bloomberg) -- South Africa's central bank is seeking feedback by Oct. 27 on three new papers published as part of its consultations with market participants over the transition to a new rand money-market benchmark to price short-term loans. The papers cover the bond, loan and money markets, the central bank said in a statement Thursday. [Extracted from the article]
- Published
- 2023
190. Can Central Bank Mitigate the Effects of the COVID-19 Pandemic on the Macroeconomy?
- Author
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Long, Han, Chang, Chun-Ping, Jegajeevan, Sujeetha, and Tang, Kai
- Subjects
COVID-19 pandemic ,CENTRAL banking industry ,PHILLIPS curve ,UNEMPLOYMENT statistics ,MONETARY policy ,ECONOMIC recovery - Abstract
Facing with the enormous economic loss resulting from the unexpected outburst of the COVID-19 pandemic, central banks around the world began to show a great activeness and implement numerous monetary policies to help mitigate the negative shocks and recover the economy. This paper aims at investigating the impact of the COVID-19 pandemic on the macroeconomy and whether central bank activeness have helped mitigate the negative shock of the COVID-19. Using the panel fixed effects model and monthly data of 38 countries from January 2020 to June 2021, this paper finds that the COVID-19 pandemic has increased inflation and unemployment apparently. More importantly, central bank activeness has a positive effect on reducing the growing pressure from the COVID-19 on inflation, while it cannot mitigate the shock of the COVID-19 on unemployment rate. Specially, government others measure, including containment and health, and stringency policies, have little effect in mitigating the negative impact of the pandemic on inflation and unemployment. Our findings suggest that the central bank activeness have heterogeneous effects on different macroeconomic indicators, and cannot mitigate the hurts of the COVID-19 pandemic for all macro indicators during the pandemic. [ABSTRACT FROM AUTHOR]
- Published
- 2022
- Full Text
- View/download PDF
191. "WAIT AND SEE" OR "FEAR OF FLOATING"?
- Author
-
Lei, Xiaowen, Lu, Dong, and Kasa, Kenneth
- Subjects
REAL options (Finance) ,FOREIGN exchange rates ,CENTRAL banking industry ,EXERCISE therapy ,DATA modeling - Abstract
This paper studies the evolution of China's exchange rate policy using real options theory. With intervention costs and ongoing uncertainty, intervention involves the exercise of an option. Increased uncertainty increases the value of this option. This "wait and see" effect leads the Central Bank to widen its intervention band. However, increased volatility also produces larger fluctuations in welfare, which creates a "fear of floating." This induces the Central Bank to set a tighter band. To study this trade-off, our paper incorporates stochastic volatility into a new Keynesian target zone model and then calibrates it to data from China. We find that increased uncertainty leads to a tighter intervention band, both in the data and in the model. Hence, in China, "fear of floating" appears to dominate the "wait and see" effect. [ABSTRACT FROM AUTHOR]
- Published
- 2022
- Full Text
- View/download PDF
192. Central bank capital management.
- Author
-
Wessels, Paul and Broeders, Dirk
- Subjects
BANK management ,CENTRAL banking industry ,BANK capital ,LEGAL tender ,BANKING industry ,QUANTITATIVE easing (Monetary policy) ,FINANCIAL risk - Abstract
This paper offers general guidelines for central bank capital management. Capital adequacy is important to be a credible, independent monetary authority over a medium-term horizon. Central banks, however, face several challenges in determining their capital adequacy. Firstly, the amount of capital only plays an auxiliary role in central banks' effectiveness given that they cannot default as long as they have the right to issue legal tender. Secondly, central banks face two types of financial risks: calculable risks from current exposures and latent risks from future exposures. These latent risks, in particular, are difficult to quantify because they stem from contingent policy measures such as quantitative easing and lending of last resort. It is argued that a central bank's target level of capital (1) can be calibrated with a confidence level that is lower than that used for commercial banks and (2) takes latent risks into account that are related to GDP or the size of the financial sector in the economy. [ABSTRACT FROM AUTHOR]
- Published
- 2023
- Full Text
- View/download PDF
193. Working of Expectations Channel of Monetary Policy Transmission in India.
- Author
-
Goyal, Ashima and Parab, Prashant
- Subjects
INFLATION targeting ,MONETARY policy ,CENTRAL banking industry ,SUPPLY & demand ,FUTUROLOGISTS - Abstract
In this paper, we examine the working of the expectations channel of monetary policy transmission for India, first by investigating the role of inflation expectations in an aggregate supply-demand (AS-AD) adapted to the Indian economy. Second, formulating an inflation function determining convergence of core inflation to its expected value in a fixed point arising through interactions between central bank (CB) expected inflation and expectations of different agents. Finally, we estimate SVARs with variables derived from the above exercises. We first estimate how expectations shocks affect macroeconomic aggregates. Second, we identify the shocks affecting expectations of households and professional forecasters (PFs). In addition, we estimate shocks influencing core inflation. Results suggest the expectation channel worked through interactions between PF forecasts and CB projections, with causality from CB projections to core and from core to household expectations. Supply shocks had short-run effects but core inflation dominated in the longer run. Expectations converged. The expectations channel of transmission to inflation was more effective through communication than through the policy rate, since the rate had low and sometimes even perverse effects. The relatively low impact of demand variables on inflation supports the hypothesized AS-AD structure. [ABSTRACT FROM AUTHOR]
- Published
- 2023
- Full Text
- View/download PDF
194. Multifactor Keynesian models of the long-term interest rate.
- Author
-
Akram, Tanweer
- Subjects
WIENER processes ,INFLATION targeting ,BANKING policy ,FINANCIAL markets ,CENTRAL banking industry ,INTEREST rates - Abstract
This paper presents multifactor Keynesian models of the long-term interest rate. In recent years, there have been a proliferation of empirical studies based on the Keynesian approach to interest rate modelling. These studies evince the connection between the long-term interest rate and the short-term interest rate. However, standard multifactor models of the long-term interest rate in quantitative finance have not been yet incorporated Keynes's insights about interest rate dynamics. Keynes's insights are introduced in two different multifactor models of the long-term interest rate to illustrate how the long-term interest rate relates to the short-term interest rate, after controlling for the central bank's policy rate, expected inflation, the central bank's inflation target, volatility in financial markets, and Wiener processes. [ABSTRACT FROM AUTHOR]
- Published
- 2023
- Full Text
- View/download PDF
195. Bank Market Power and Central Bank Digital Currency: Theory and Quantitative Assessment.
- Author
-
Chiu, Jonathan, Davoodalhosseini, Seyed Mohammadreza, Jiang, Janet, and Zhu, Yu
- Subjects
CENTRAL banking industry ,ELECTRONIC money ,ONLINE banking ,BANK loans ,BANK deposits ,BANK accounts ,INTERMEDIATION (Finance) - Abstract
This paper develops a micro-founded general equilibrium model of payments to study the impact of a central bank digital currency (CBDC) on intermediation of private banks. If banks have market power in the deposit market, a CBDC can enhance competition, raising the deposit rate, expanding intermediation, and increasing output. A calibration to the US economy suggests that a CBDC can raise bank lending by 1.57% and output by 0.19%. These crowding-in effects remain robust, albeit with smaller magnitudes, after taking into account endogenous bank entry. We also assess the role of a non-interest-bearing CBDC as the use of cash declines. [ABSTRACT FROM AUTHOR]
- Published
- 2023
- Full Text
- View/download PDF
196. Financial stability and monetary policy of the Central Bank of West African Countries: a Markov-Switching model.
- Author
-
Houngbédji, Honoré Sèwanoundé and Bassongui, Nassibou
- Subjects
MONETARY policy ,MONETARY unions ,CENTRAL banking industry ,FINANCIAL security ,INTEREST rates ,BANKING policy - Abstract
Purpose: This paper aims to examine the response of monetary policy to financial instability in the West African Economic and Monetary Union. Design/methodology/approach: Through annual aggregated data from 1970 to 2019, the empirical strategy is based on the Markov regime-switching model with fixed probabilities. Findings: The results revealed that the monetary policy of the central bank of the West African Economic and Monetary Union is characterized by two regimes (calm and distress) with respect to the trend of financial stability. The authors also found that the occurrence of the calm regime was likely greater than that of the distress regime. In addition, the calm regime is longer than the distress regime. The authors finally revealed that the central bank reacts to financial instability risk by increasing its short-term interest rate when financial instability reaches a threshold. Research limitations/implications: The limitation of this study is the unavailability of monthly or quarterly data that are more suitable for the methodological approach adopted. Originality/value: This study is the one to estimate the response of the Central Bank of West African Countries to financial stress using a novel approach based on the Markov-Switching regression. [ABSTRACT FROM AUTHOR]
- Published
- 2023
- Full Text
- View/download PDF
197. Raising Inflation Expectations Can Backfire: Jackson Hole Paper.
- Author
-
Condon, Christopher
- Subjects
ECONOMIC expansion ,COVID-19 pandemic ,MONETARY policy ,CENTRAL banking industry - Published
- 2020
198. Money Market Disconnect.
- Author
-
Ballensiefen, Benedikt, Ranaldo, Angelo, and Winterberg, Hannah
- Subjects
REPURCHASE agreements ,MARKET segmentation ,CENTRAL banking industry ,QUANTITATIVE easing (Monetary policy) ,ASSETS (Accounting) - Abstract
A repurchase agreement (repo) is a source of cash and collateral. We document that the money market is more segmented when the collateral motive prevails. Two crucial aspects of the central bank framework lead to this disconnect: banks' access to the central bank's deposit facility and assets' eligibility for quantitative easing (QE). We show that repo rates lent by banks with access to the deposit facility and secured by QE eligible assets are more collateral-driven and disconnected from funding-based money market rates. Our results are relevant for different monetary policies and have suggestive implications for the monetary policy pass-through. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]
- Published
- 2023
- Full Text
- View/download PDF
199. Should banks treat crypto like any other asset?
- Author
-
Brooks, Brian and Hoenig, Thomas
- Subjects
CRYPTOCURRENCIES ,ASSETS (Accounting) ,ELECTRONIC funds transfers ,BANKING industry ,STOCK certificates ,NATIONAL currencies ,PAPER money ,CENTRAL banking industry - Abstract
Banks handle checkingaccounts and mortgage loans and derivatives differently,so it follows that banks using stablecoins for paymentswill treat them differently not only from crypto lendingproducts, but also from their traditional-financecounterparts. Bankers' mystification about cryptocurrency as afinancial category is well, mystifying in light of theway banks have adapted to and even advocated forother game-changing technologies in the past. [Extracted from the article]
- Published
- 2021
200. Kindleberger in retrospect: the Federal Reserve's dollar swap lines and international lender of last resort rules.
- Author
-
Carré, Emmanuel and Maux, Laurent Le
- Subjects
CHARITIES ,MONEYLENDERS ,FIXED prices ,CENTRAL banking industry ,ARGUMENT - Abstract
Our paper shows how Charles P. Kindleberger examined the function of the international lender of last resort and anticipated the rules governing the dollar swap line program (with unlimited amounts and at a fixed price) implemented by the Federal Reserve in the aftermath of the failure of Lehman Brothers in September 2008. We systematically explore Kindleberger's works on the central bank swap agreement in order to discern the theoretical foundations of the international lender of last resort rules he proposed. In this respect, two of his arguments that appear concomitantly must be distinguished. The first concerns the burden that the leadership partly or mostly should shoulder because of the problem of free riding—this is the traditional argument of benevolent leadership. The second argument concerns the efficiency with which the leadership operates as the stabilizer given the international monetary and financial context—this argument of the efficient stabilizer has been far less studied in the literature. We find that the Federal Reserve was not a benevolent monetary institution, but the global financial stabilizer instead—meaning that Kindleberger's second argument finally prevailed. We conclude by emphasizing how central bankers rediscovered Kindleberger's contribution to the international lender of last resort function. [ABSTRACT FROM AUTHOR]
- Published
- 2022
- Full Text
- View/download PDF
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