Sovereign debt
ECB’s Draghi defends OMTs to German audience
European Central Bank president Mario Draghi stresses bond purchase plans are within the central bank’s mandate; says there are signs reforms are working
IMF loans impact sovereign bonds, says Bank of Spain paper
Spanish study finds countries that receive IMF funding issue less sovereign debt, and with shorter maturities; effect is stronger under particular conditions
IMF mission begins new talks with Serbia
Fact-finding mission focuses on macroeconomic outlook, fiscal situation and effects of changes to the central bank law; government reveals efforts to cut budget
ECB unveils details of bond purchase plans
Mario Draghi sets out plans for European Central Bank to buy debt of ailing eurozone economies; questions remain over impact
Outgoing Serbian vice-governor fearful over repercussions of law change
Bojan Marković voices concerns over long-term impact of changes to Serbia’s central bank law; says rushed passage of legislation and change in senior management could cause problems
Bundesbank criticises ECB bond-buying proposals
Decision to share solvency risks should be taken by European governments not the ECB, says Deutsche Bundesbank; warns German government debt ratio likely to rise this year
Central Bank of Ireland highlights varied success of aid programmes
Research note examines progress of five European countries with EU-IMF programmes towards meeting debt sustainability targets; warns Ireland is likely to miss targets
CNB paper shows power of inflation targeting
Czech National Bank working paper shows inflation targeting can lead central banks to offset government spending shocks; can also have disciplinary effect on fiscal policy
IMF working paper warns of dangers in sovereign debt restructuring
Researchers find debt restructurings have adverse impact on economic growth; say debt sustainability is a crucial consideration
Central Bank of Barbados governor praises government’s fiscal strategy
DeLisle Worrell says Barbadian government’s policy strategy is appropriate to the ‘economic reality’; follows downgrade of sovereign debt to BB+ in July
RBI paper measures threshold of sustainable current account deficit in India
Working paper warns of risks posed by large current account deficits; finds sustainable level of deficit has risen since balance of payments crisis in the 1990s
IMF paper studies effect of global environment on domestic bond yields
Working paper analyses link between global economic conditions and emerging market domestic bond yields; finds financial market turmoil raises sensitivity to government spending increases
Bank of Israel warns of ‘lack of clarity’ in government fiscal policy
Report assesses domestic and external economic conditions affecting the Bank of Israel’s interest rate decision; low CPI, weak shekel and fiscal policy uncertainty contribute to rate hold
Fischer calls for Israeli government action on deficit
Bank of Israel governor says government’s decision to increase its fiscal deficit instead of raising taxes will hurt future generations; impact will be most acute should eurozone fragment
IMF urges US policy-makers to take action against fiscal cliff
Conclusions of IMF Article IV consultation with US highlight risks from fiscal cliff and debt ceiling; calls on policy-makers to strike deal at ‘delicate juncture’ for world economy
IMF paper warns against delays in Japanese fiscal consolidation
Working paper studies impact of budget deficit in Japan on intergenerational inequality; finds delaying budget cuts would adversely affect younger generations
Thailand reports improved economic conditions
Senior director of macroeconomic and monetary policy department notes overall better conditions in second quarter of 2012; European debt crisis has caused problems for export market nonetheless
Central Bank of Ireland positive in quarterly bulletin
Quarterly bulletin suggests Irish growth is being held back by negative external developments; however, domestic indicators show signs of strength
Ex-UK MPC members discuss future of eurozone
Panellists at event in London say euro will survive but with a smaller group of countries; argue UK is in dangerous position to respond to eurozone collapse
IMF paper warns against frontloaded fiscal adjustment
Working paper studies changes in fiscal multipliers based on economy’s position in the business cycle; cautions that large budget cuts are likely to create or worsen recessions
RBI paper finds monetary policy undermined by unsustainable deficits
Researchers assess link between high government debt and persistent inflation; find restrictive monetary policy may struggle to contain inflation if accompanied by a large budget deficit
RBI research examines debt management conflict of interest
Working paper discusses whether the Reserve Bank of India’s dual monetary policy and debt management roles affect price stability mandate; finds little evidence of impact
IMF paper finds stronger and more complex fiscal rules following crises
Working paper compiles dataset of national and supra-national fiscal rules; suggests rules were strengthened after crises in the 1990s and after the financial crisis
World Gold Council says disinflation may support gold demand
Statistical commentary argues gold price may increase due to disinflation; says current economic environment ‘supportive’ of gold demand