Wednesday , January 29 2020
Home / Tag Archives: Central Banks / Monetary Policy

Tag Archives: Central Banks / Monetary Policy

Norway appoints a Monetary Policy and Financial Stability Committee

I have been arguing why RBI needs to have a different forum to discuss matters pertaining to fin stability. Currently, all discussions with media and public are mooted via MPC meeting which mainly looks at price stability. Central banks such as those of England and US have built seperate forums to discuss matters on finance. Central Bank of Norway did not have  MPC as of now. Now they have gone ahead and established a Monetary Policy and Financial Stability Committee: The Monetary...

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Central bankers in climate change policy teams: Good or bad?

My new piece in Moneycontrol. This one reflects on the recent appointment of Mark Carney as adviser to Prime Minster on Climate change. This entry was posted on January 24, 2020 at 11:39 am and is filed under Central Banks / Monetary Policy, Economics - macro, micro etc, Financial Markets/ Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own...

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Central bank group to assess potential cases for central bank digital currencies

I wrote this piece on how central banks after ignoring and threatening digital currencies have warmed upto the idea of central bank digital currencies. It reminds me of this famous hindi movie song. Yesterday 6 central banks signed an agreement to study digital currencies: The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, Sveriges Riksbank and the Swiss National Bank, together with the Bank for International Settlements (BIS), have created a group to...

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Seigniorage through periodic recoinage: When the validity of money was restricted in time

Roger Svensson and Andreas Westermark have this superb piece on monetary history. Call it demonetisation of coins: For almost 200 years, old coins were frequently declared invalid in large part of medieval Europe and had to be exchanged for new ones for an exchange fee. This column shows that frequent recoinage generates incomes for the minting authority when the tax level is low enough and the punishment for using invalid coins is high enough, and when there is a limited coin volume in...

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RBI releases Board Minutes

After a long wait and requests, RBI has begun to release its Board Minutes: The Reserve Bank of India (RBI) has been, over the years, taking steps to enhance transparency with regard to its functioning. The minutes of the meetings of the RBI’s Central Board of Directors (Central Board) have evinced considerable public interest and some of these have been shared with persons who sought them under the Right to Information Act 2005 (RTI Act). As a measure of further enhancing public...

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The Green Swan: Central banking and financial stability in the age of climate change

Kudos to BIS for bringing a report with such an innovative title. Taleb made his point about financial risks via his boo titled Black Swan and BIS is doing the same highlighting climate risks with the title Green swan! The report is written by 4 scholars – Patrick Bolton, Morgan Després, Luiz Awazu Pereira da Silva, Frédéric Samama and Romain Svartzman: Climate change poses new challenges to central banks, regulators and supervisors. This book reviews ways of addressing these new risks...

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History of RBI’s Ways and Means Advances to Central Government: Old Wine in New Bottle?

Good friend Niranjan pointed to me how WMA was started as a way to bridge the “short-term gap” between Government’s receipts and expenses. This piece tracks the short history of WMA WMA was started from Apr-1997. Why 1997? Well, in 1997 the Government and RBI signed an agreement to get rid of automatic monetisation of government deficits. Before 1994, if the Government had a deficit, it just issued ad-hoc T-Bills which were held by RBI. In the 1996-97 Budget Speech, then FM P...

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The evolution of monetary policy frameworks in the post-crisis environment

Anna Samarina and Nikos Apokoritis in this voxeu piece: Monetary policy frameworks have evolved since the global crisis. The column investigates the changes for 14 advanced economy central banks. Banks are defining lower, more narrow inflation targets. Transparency and commitment have been enhanced, and the monetary policy toolkit has been expanded. ….. Several conclusions can be drawn about the evolution of monetary policy frameworks after the crisis. First, no central bank has...

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Efficacy of Credit Ratings in Assessing Asset Quality: An Analysis of Large Borrowers

RBI Bulletin Jan-2020 has an article by Sukhbir Singh and Pallavi Chavan: Using data on credit ratings from the Central Repository of Information on Large Credits (CRILC) mapped with Prowess, this article examines the efficacy of ratings in facilitating a sound and timely assessment of the asset quality of large borrowers. About one-fourth of the sampled Non-Performing Asset (NPA) exposure from CRILC was found to be in investment grade a quarter before slipping into the NPA category. The...

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A monetary policy framework for all seasons?

Mark Carney of Bank of England in this speech argues that Inflation targeting has been a framework for all seasons in UK: To set the stage for today’s discussions, I would like to do two things. First, I will review the conduct and performance of inflation targeting during my time as Governor. This period, which roughly coincides with the post-crisis recovery and which has seen more than its share of shocks and structural developments,provides some insights to the ability of inflation...

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