monetary policy

Federal Reserve, monetary policy

Following an extensive review that included numerous public events across the country, the Federal Open Market Committee (FOMC) on Thursday announced the unanimous approval of updates to its Statement on…

Research paper: China central bank collateral policy reduced spreads in acceptable bonds by 42-62 bps

July 13, 2020

Central Banks, China, collateral, monetary policy

The Collateral Channel of Monetary Policy: Evidence from China Hanming Fang, University of Pennsylvania – Department of Economics; National Bureau of Economic Research (NBER) Yongqin Wang, Fudan University Xian Wu,…

BIS research shows higher bank capital reduces volatility spillovers

April 14, 2020

BIS, G-SIBs, monetary policy, volatility

The financial system is a public good, with banks at their heart. Shocks that hit one bank tend to spill over to other banks, and can cause a cascade of…

ECB announces additional LTROs among monetary policy measures

March 12, 2020

The ECB Governing Council decided on a comprehensive package of monetary policy measures: (1) Additional longer-term refinancing operations (LTROs) will be conducted, temporarily, to provide immediate liquidity support to the…

Central banks consider new growth tools amid coronavirus worries

January 28, 2020

China, ECB, Federal Reserve, Interest rates, Regulatory

China, coronavirus, ECB, Federal Reserve, monetary policy, topstory

The Fed may be looking at the end of its already broadened toolkit for boosting growth. The ECB is considering all of its policy options while expressing frustration with politicians.…

ECB launches review of its monetary policy strategy

January 24, 2020

Review will encompass quantitative formulation of price stability, monetary policy toolkit, economic and monetary analyses and communication practices Other considerations, such as financial stability, employment and environmental sustainability, will also…

Getting from a bigger Fed balance sheet to calm repo markets (Premium)

October 15, 2019

Federal Reserve, Interest rates, Repo

Federal Reserve, monetary policy, Repo, Standing Repo Facility, topstory

Fed: “Okay, here’s the plan: build up reserves and that’s going to keep repo rates in check. Okay? Okay.” The Fed has announced its strategy for interest rate management. Will…

BIS releases reports on unconventional monetary policy tools and the role of central banks and market functioning

October 8, 2019

BIS, Central Banks, CGFS, Committee on the Global Financial System, monetary policy

The Committee on the Global Financial System (CGFS) and the Markets Committee have published two major reports on the implementation and implications of unconventional monetary policy tools (UMPTs) introduced by…

Markets warned on populism eroding central bank independence

April 2, 2019

Bank of England, Regulatory

Central Banks, ECB, monetary policy, topstory, Yves Mersch

The European Central Bank’s Yves Mersch, Member of the Executive Board, recently spoke about central bank independence. There is a long history of argument on this topic, and central bank…

A new analysis on the impact of central bank digital currencies to private banks

October 17, 2018

Central Bank Digital Currencies, cryptocurrencies, monetary policy, St. Louis Fed, topstory

Bank of England, Blockchain, Cryptocurrency, Regulatory, Technology

A research paper from the St. Louis Federal Reserve investigates how a central bank digital currency would impact private banks, but along the way gets to the heart of a…

BoE’s Carney says weak pay growth in UK unlikely to be caused by tech

September 14, 2018

News and Notes – Fintech

Bank of England, Central Banks, monetary policy, technology

Excerpts from speech by Mark Carney, Governor of the Bank of England, 2018 Whitaker Lecture, Central Bank of Ireland, 14 September 2018 Although current rates of pay growth in the…

How can central banks effectively monitor transmission of monetary policy?

August 8, 2018

Collateral Management, ECB, Liquidity Management

ECB, Liquidity, monetary policy, topstory

A new paper from the European Central Bank looks at the transmission of monetary policy and the concept of fragmentation, which means that monetary policy goals are not getting through…

BoE research shows OIS rates measure monetary policy expectations

February 9, 2018

Bank of England, monetary policy, OIS

Bank of England staff Simon Lloyd assesses the use of overnight indexed swap (OIS) rates as measures of monetary policy expectations. He finds that 1- to 12-month US OIS rates…

Basel Committee consults on extraordinary monetary policy operations in the NSFR

December 24, 2017

Basel III, BCBS, monetary policy

The Committee released its first technical amendment, which is related to the treatment of extraordinary monetary policy operations in the Net Stable Funding Ratio. To provide greater flexibility in the…

International Banker: Collateral is central bank policy’s secret sauce

July 11, 2017

Central Banks, collateral, monetary policy

Modern economies run on the back of a monetary and financial system through which most transactions ultimately settle in central bank money. As the ultimate issuers of money, central banks…

Cleveland Fed shows big spreads in Fed Funds simple rules models

March 14, 2017

Federal Reserve, Interest rates, Short Term Interest Rate Benchmarks, US

Fed Funds, Federal Reserve, monetary policy, topstory

The Federal Reserve Bank of Cleveland periodically publishes projections on Federal Funds based on a concept of “simple rules”. Simple rules are formulae based on a finite set of real-world…

A proposed change to US balance of trade metrics creates a new benchmark challenge for collateralized trading

March 1, 2017

Big Data, Risk Management, Systemic Risk, US

balance of trade, collateralized trading, monetary policy, statistics, topstory

The US administration is considering a change in the way trade statistics are calculated. In the world of collateralized trading, including spread-based swaps and other derivatives pegged to predictors, any change to…

ECB report shows more market instability as central bank policy is uncertain

January 18, 2016

ECB, Europe, Federal Reserve, Regulatory, Shadow Banking

ECB, Fed, monetary policy, Quantitative Easing, topstory

On January 13th, the European Central Bank (ECB) released its summary of their December 2-3rd debate over stimulus and rate direction. There remain calls for stronger and increasing stimulus by…

Rate games adding to the complexity in collateralized funding markets (Premium)

January 13, 2016

China, ECB, Federal Reserve, Interest rates, Repo, Short Term Interest Rate Benchmarks, Systemic Risk

China, Euro, fed rate hike, Fed Repo Facility, monetary policy, topstory

Now that the US Fed has uncorked the bottle with their first rate hike in several years, central banks around the world are starting to react in interesting ways. As…

What the repo market teaches us about the Fed tightening rates

April 8, 2015

Jonathan Cooper

Basel III, Dodd-Frank, Federal Reserve, RRP

GCF, IOER, monetary policy, topstory

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The Fed publishes “Overnight RRP Operations as a Monetary Policy Tool: Some Design Considerations”, a look at the RRP program objectives and risks, Part I

March 5, 2015

Jonathan Cooper

Federal Reserve, Market infrastructure, Regulatory, Repo, RRP, Short Term Interest Rate Benchmarks, Systemic Risk

Federal Reserve, monetary policy, Repo, Reverse Repo Facility, topstory

The NY Fed has published a lengthy article focusing on the Reverse Repo (RRP) facility, “Overnight RRP Operations as a Monetary Policy Tool: Some Design Considerations”, Federal Reserve Bank of…

Smart thinking on monetary and economic policy from the BIS

June 25, 2013

Basel III, Regulatory, Systemic Risk

BIS, Cecchetti, monetary policy, moral hazard