India
Indian central bank sets up fintech working group
Inter-agency working group will report on financial technology within six months of first meeting to enable Indian authorities to review regulation of sector
Rajan has left his mark but risk of fiscal dominance remains
Vishrut Kansal examines the legal framework Raghuram Rajan’s successor will face, arguing much of the outgoing RBI governor’s work will continue but more safeguards are needed
Rajan urges completion of bank cleanup
Outgoing governor argues actions taken to address public sector bank balance sheets must be taken to their “logical conclusion”; encourages government to provide capital injection
Rajan says India should not change course, as he steps back from RBI
Governor announces his intention to return to academia after three eventful years at the helm of India's central bank, and urges policy-makers to stay strict on inflation
RBI approves new method for restructuring stressed loans
Indian banks will be able to split some of their largest stressed loans in two; rules introduced as RBI looks to help banks achieve “clean and fully provisioned bank balance sheets” by March 2017
Rajan sidesteps question on RBI future
Reserve Bank of India governor says decision on second term will be reached after discussion with government; RBI holds policy rate at 6.5% after inflation surprise
RBI moves to curb concentrated credit risk
Central bank hopes new prudential measures will reduce banks’ “very high” exposures to large corporations and encourage firms to turn to capital markets for funding
Rajan sided with the consensus, minutes show
RBI governor cuts rates in line with views of external advisers; four of the five members wanted to reduce the repo rate at the April 5 meeting
RBI plans to regulate nascent P2P market
Central bank proposes bringing peer-to-peer lending within its regulatory remit, fearing lack of oversight might lead the rapidly growing sector to develop “unhealthy practices”
Time ‘ripe’ to consolidate public banks – RBI’s Gandhi
Consolidation could help banks spread their risk and compete on a global scale, deputy governor says – though they may need a “nudge” from government to get going
Rajan’s salary makes him a bargain among G20 governors
Indian governor takes home an unusually small sum each year compared with some other G20 governors, and comes out favourably on other metrics too
RBI deputy outlines ‘key tasks’ for market development
Harun Khan lays out the main areas of work in broadening financial markets, including efforts to improve liquidity and access and improving central bank communication around debt management
Reserve Bank of India modifies liquidity framework
Rajan spells out plans to “progressively lower” the liquidity deficit in the banking system as part of a broader shift in focus; RBI cuts policy rate by 25bp with inflation on track
Rajan and Mishra lay down rules of the monetary game
Authors warn current models may display the policy biases of those who built them, calling for better dialogue and analysis of monetary policy spillovers
Banks start to clean up balance sheets after RBI asset quality review
Efforts will enable flow of credit in the long term, deputy says; improving capital buffers and governance structures also beneficial
Rajan offers solution to global policy spillovers
RBI governor sketches rating system designed to hold central banks to account; frank discussion may be enough, he says, but tougher rules in the style of Bretton Woods are also an option
People: New York Fed research head retires, RBNZ appoints new head of currency
James McAndrews will leave the Federal Reserve Bank of New York after 19 years; Steve Gordon gets new portfolio at RBNZ; and more
BIS paper: short-term interest rate may no longer be enough to set policy
Globalised debt markets, the falling long-term interest rate and dollar debt accumulation has altered every major aspect of the monetary transmission mechanism in emerging markets, authors say
Indian government unveils final MPC design
Bill has been amended to cut committee size to six and give governor a casting vote in the event of a tie; government also pressing ahead with plans to clean up banking sector
RBI paper questions impact of global spillovers
Authors find money and credit markets in India are largely unaffected by spillovers, although there is an impact via debt markets and the indirect effects of global growth and inflation
Fiscal dominance can invert transmission mechanism, Lahiri and Patel find
Authors show ‘statutory liquidity requirement’ and fiscal dominance can invert the effects of monetary policy or render it impotent; suggest ‘rebalancing’ India’s reform agenda
Rajan tells banks to prepare for ‘deep surgery’
RBI governor says banks will have until March 2017 to clean up their balance sheets; banking sector represents weak spot of otherwise vibrant economy
RBI report lays ground for trading new derivatives
Working group proposes allowing new interest rate options in India to improve financial institutions' ability to hedge interest rate risk
RBI’s Gandhi: are regulators ‘barking up the right trees’?
Deputy governor stresses effective regulation is not about ever more detailed rules but rather taking a broad view and spotting emerging risks early on