Asset prices
Hedge funds and dealers have outsized price impact – BoE paper
Mutual funds have smaller impact so may not play central role in fire sales, authors say
Federal Reserve posts largest operating loss ever
As of March 21, the Fed owed $157.8 billion to an accounting device, a “deferred asset”
BoE says risk of ‘sharp correction’ in asset prices has risen
Drop in asset prices could trigger renewed “dysfunction” in core markets, central bank says
US fiscal stimulus boosted vehicle price pressures – Fed research
Vehicle sales driven by consumer and small business stimulus, say Fed researchers
Riskiest non-banks shrink for first time since 2009
FSB says narrow measure of riskiest firms fell in 2022 as asset price falls hit investment funds
Bank of England launches system-wide stress-test scenario
Exercise is first-of-its-kind look at macro-prudential impact of shocks to banks and non-banks
Claudio Borio on financial cycles, operating frameworks and non-bank reform
The BIS veteran highlights a ‘unique constellation’ of challenges as central banks travel the ‘last mile’ in bringing down inflation – and says there are many more miles to go on non-bank reform
Ring-fencing protects retail banks, but lowers total equity value
BoE research finds concentrating risks in one group of banks depresses asset prices
Carney derides UK ex-PM’s economic policy
Former BoE governor says cutting taxation does not automatically lead to growth
Stefan Ingves on central bank failings on inflation and financial stability
The Riksbank veteran speaks about liquidity, interest rate and non-bank regulatory reforms, the importance of saying ‘no’, and the need for explicit legal definitions for digital money
Liquidity buffers had mixed impact during Covid-19, ECB paper finds
Higher buffers for funds slowed initial fire sales but had less impact during “peak phase”
Central banks’ pandemic interventions averaged 6% of GDP
IMF paper finds relief measures were three times bigger than in global financial crisis
Common deposit insurance essential for financial stability, says ECB
Central bank says tighter financial conditions are putting pressure on households and businesses
Climate change and the role for central banks
Gavin Bingham, Andrew Large and Paul Fisher explain how climate change affects central banks and the competing tensions it raises in relation to policy responses
Book notes: A guide to good money, by Brendan Brown and Robert Pringle
The authors make some good points even if one does not agree with this full-bodied attack on Keynesian economics and inflation targeting
Bitcoin price does not respond to market signals – paper
Researchers find cryptocurrency value “orthogonal” to most economic indicators
Loose monetary policy has ‘big’ impact on crisis risk – NBER paper
Authors find causal link between easy policy stance and future financial instability
BoE says rush to sell could undermine insurance stability
Supervisor questions whether some firms’ stress-test assumptions are “realistic”
The rise of non-SDR currency reserves
New Cofer data release may show an overall fall in FX reserves, writes Gary Smith
BoE begins unwinding gilt market intervention
Use of “reverse enquiry window” designed to limit market impact from £19 billion sales
Inflation: what went wrong, and why?
Charles Goodhart and Manoj Pradhan detail three theories on the causes of high inflation, as well as their implications for policy responses