Monetary Policy

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Addendum: Is this time different?

Friday, 4 April 2014
blog
An earlier post pointed out that strengthened policy frameworks in many emerging market economies have reduced the risks of contagion. As a result, notwithstanding concerns about emerging market vulnerabilities in the wake of Fed tapering of quantitative easing, financial markets may discriminate between countries in contrast to past episodes of monetary policy "rebalancing."

Inside the Issues 4.22 | Great Expectations, Slow Transformations

Thursday, 3 April 2014
video
This week, CIGI Senior Fellow Manuela Moschella visits the Inside the Issues studio to discuss her new book, Great Expectations, Slow Transformations: Incremental Change in Post-Crisis Regulation. After reviewing some of the regulatory issues that initiated the 2008 financial crisis, Moschella discusses the role of global financial institutions along with the benefits of incremental regulatory reform. Would the global system be able to manage another financial crisis?

CIGI paper chronicles Canada’s role in multilateral financial diplomacy and identifies areas for improvement

Tuesday, 1 April 2014
article
Canada needs to become better at seizing leadership opportunities if it wants to hold influence over the international financial system, according to a new report from CIGI.

Banking Union: Progress Made, but the Devil Is in the Details

Tuesday, 1 April 2014
publication
The March 20, 2014 agreement on the Single Resolution Mechanism (SRM) is a major step toward repairing the euro area’s financial architecture. The SRM is the second pillar of the blueprint for banking union, following agreement on the Single Supervisory Mechanism (SSM), which will take effect when the European Central Bank (ECB) takes over the supervision of systemic banks in November 2014. Both pillars are needed to align banking supervision and resolution at a central level, thus avoiding any tensions between EU-level supervision and national resolution schemes.

China's Long March Toward Economic Rebalancing

Tuesday, 1 April 2014
publication
After more than three decades of sustained economic growth, China has become the second-largest economy in the world. Chinese policies and behaviour have come to shape the global economy in profound ways and what China does, or does not do, at home and abroad often has broad implications for the rest of the world.

Secular stagnation, deflation risks, beggar-thy-neighbor policies

Thursday, 27 March 2014
blog
Ok, so, here is the problem worrying some: Behind the encouraging headlines of somewhat stronger growth in the advanced economies, Larry Summers worries that the North Atlantic economy is at risk of secular stagnation; meanwhile, the IMF frets that Europe is flirting with deflation, China is slowing, and the emerging markets are fearful of more “taper tantrums” as the Fed begins to slow the pace of quantitative easing.

CIGI report assesses the viability of the IMF’s creditor status, in light of lessons from the Euro crisis

Wednesday, 26 March 2014
article
A credible framework for maintaining discipline over International Monetary Fund (IMF) lending is required to ensure the viability of the organization’s preferred creditor status, according to a new CIGI report.

Unbalanced central bankers

Monday, 24 March 2014
blog
A key tenant of inflation-targeting central bankers (ITCBs) is symmetry. That is to say, policy responses that are symmetric with respect to deviations from their inflation target: inflation above the target elicits tightening; inflation below the target triggers monetary easing. All ITCBs profess fealty to the principle of symmetry. Yet, as the chart below illustrates, with the exceptions of Australia and the U.K., over the past two years inflation in most advanced economies has been persistently below target. Could this performance belie an asymmetry in what ITCBs say and do? Are their policy responses to deviations from the target unbalanced?

True citizens, honest guardians, proper markets and just laws

Tuesday, 18 March 2014
blog
Martin Wolf has a thoughtful piece in the Financial Times on the prerequisites for democracy. As readers of this blog will know, I have enormous respect for Wolf's work. His latest article was likely motivated by the brinkmanship being played out in Crimea: had there been a more stable democracy established in Ukraine, perhaps, the instability of recent weeks would not have provided President Putin with the pretext for his de facto annexation of the Crimean peninsula.

UK shakes up Bank of England with three new top policy appointments

Tuesday, 18 March 2014
article
David Milliken and William Schomberg
Director of CIGI's Global Economy Program Domenico Lombardi comments on the Bank of England's appointment of IMF official Nemat Shafik, as deputy governor for markets and banking.