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Home / Tag Archives: Central Banks / Monetary Policy

Tag Archives: Central Banks / Monetary Policy

When the Bank of England rescued Midland Bank in early 1990s

As we are dealing with several bank failures and rescues in India, good to read about another bank from other country. Clive Horwood refers to an extract from the book by Prof Harold James – Making a Modern Central Bank – The Bank of England 1979-2003: It was inherent in the mandate of the Bank of England in the 1980s and 1990s, as overseer of UK financial services, that its successes remained hidden in the shadows, while its failures were exposed to the harshest of lights. Those two...

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The impact of the pandemic on cultural capital in the finance industry

Kevin Stiroh of New York Fed in this speech discusses how and whether the pandemic will impact culture in financial industry: From the perspective of cultural capital, this sudden and dramatic shift in how we work raises multiple questions. First, how does cultural capital influence outcomes in this new environment? How are we drawing on, or depleting, the cultural capital that already existed? Does this environment pose new challenges regarding behavioral risk? And finally, is it...

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The second wave of central bank policy innovation

Pierre Ortlieb of OMFIF in this piece: As the Covid-19 pandemic began rippling through financial markets and the global economy earlier this year, central banks quickly unveiled a raft of initiatives aimed primarily at easing short-term liquidity conditions. These policy innovations took place across developed and emerging markets, encompassing new assets purchases, lending facilities and institutional relationships. Many emerging market central banks broke new ground by engaging in...

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Kenya’s digital transformation journey

Dr. Patrick Njoroge, Governor, Central Bank of Kenya in this speech: Digitalization, the theme I have been asked to focus on, has seen us through this difficult period. In the context of the COVID-19 containment measures—and particularly movement restrictions and curfews—digital platforms have enabled our citizens to access financial, health, education and medical services, entertainment, and shop online. In Kenya, the digital rails built over the last fifteen years have been a saving...

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Monetary policy response in emerging market economies: why was it different this time?

In 2020 crisis, EME central banks were able to cut policy rates despite fears over currency depreciation and capital outflows. Ana Aguilar and Carlos Cantú of BIS in this short paper point how EME central banks could do so: During the Covid-19-induced financial stress in March 2020, central banks in emerging market economies (EMEs) departed from their monetary policy playbook by cutting rates even in the face of sharp currency depreciations and massive capital outflows. Two factors were...

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Making a Modern Central Bank and Six Days in September – Britain’s progressive estrangement

David Marsh of OMFIF reviews two books which discuss how the seeds of Brexit were sowed in 1992 currency crisis: Currency dramas linking the UK and continental Europe are tangled tales of confusion, intrigue and progressive estrangement. Harold James’ book on the 1979-2003 history of the Bank of England, to be launched by OMFIF on 23 November, acts as a powerful companion volume to Six Days in September: Black Wednesday, Brexit and the making of Europe, by William Keegan, David Marsh and...

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Building a Green Yield Curve

SO far, the coloour of finance was seen as either black or red as in profits or loss. Dr Sabine Mauderer of the Deutsche Bundesbank in this speech points that Germany is planning to build a Green yield curve: Germany issued a green bond with a 10-year term for the first time in September, followed by another green bond with a 5-year term last week. Both issues, with a total outstanding volume of € 11.5 billion, attracted huge interest among investors. Looking back at these successful...

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Inside the regulatory sandbox: effects on fintech funding

Giulio Cornelli, Sebastian Doerr, Leonardo Gambacorta and Ouarda Merrouche in this BIS paper evaluate impact of sandboxes: The rise of fintechs promises to spur competition in the financial sector. This could lead to sizeable efficiency gains, more choice for consumers, and enhanced financial inclusion. However, the potentially disruptive growth of firms offering novel products and services poses new challenges for financial stability and consumer protection. In response, policymakers...

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Norway’s old banknotes no longer legal tender, however can be exchanged till 2029

This central bank business of introducing new notes and withdrawing older ones became a huge interest post-demonetisation in India. Norway central bank introduced new series of notes last year. Now it has decided to withdraw the old series of notes and they will no longer be legal tender. However, the old notes can be exchanged from the central bank for next 10 years: When a banknote has been withdrawn, it is no longer legal tender. This means, for example, that shops are no longer...

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Central Bank Digital Currency: A Literature Review

Francesca Carapella and Jean Flemming of Federal Reserve in this research sum up the literature so far: Technological advances in recent years have led to a growing number of fast, electronic means of payment available to consumers for everyday transactions, raising questions for policymakers about the role of the public sector in providing a digital payment instrument for the modern economy. From a theoretical standpoint, the introduction of a central bank digital currency (CBDC) raises...

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