Tag Archives: central banking

On August 1, 2018, the 10-year Japanese government bond yield, shot through the roof (albeit a very low one). Yields shifted from 0.05 per cent on July 31 to 0.129 on August 1, which was the largest one-day rise since July 29, 2016 (when the yield rose 0.101 per cent). The Financial Times article (August 1, 2018) – Japanese bond market jolted as traders test BoJ resolve – wrote that “traders wasted no time in testing the Bank of Japan’s resolve to loosen its target range for the debt...

The paper analyzes briefly the changing ideas on the role of money and banks from William Petty to Thomas Tooke, including the works of Adam Smith, David Ricardo, and Karl Marx. It analyzes the role of ideas in shaping the evolution of central bank regulation. Particular importance is given to the Bank of England’s inconvertibility period, from 1797 to 1821, and the ensuing debate in shaping Robert Peel’s Bank Act of 1844, which is often seen as the birth of modern central banking. The...

This paper sets out three models of central bank digital currency (CBDC) that differ in the sectors that have access to CBDC. It studies sectoral balance sheet dynamics at the point of an initial CBDC introduction, and of an attempted large-scale run out of bank deposits into CBDC. We find that if the introduction of CBDC follows a set of core principles, bank funding is not necessarily reduced, credit and liquidity provision to the private sector need not contract, and the risk of a...

China has selected American-trained economist Yi Gang to become the country’s new central bank governor, the Wall Street Journal (WSJ) reported on Sunday, citing unnamed people with knowledge of the matter. "American-trained." Oh oh. Hope he is not as clueless as the US Fed and conventional US academics. OANChina To Appoint Yi Gang As New Central Bank Governor: WSJ

As promised not long ago, here a short paper on the history of central banks presented at ASSA meeting in Philadelphia. The paper is short, given the submission policy. It discusses the growing literature on the origins of central banks, and essentially disagrees with Charles Goodhart, who is the authority on the topic.…  The point of the paper is that early public banks (essentially Italian and Dutch banks that preceded the the Swedish and English central banks) were central banks because...

David Graeber and the Bank of England. Lars P. Syll’s BlogHow money is createdLars P. Syll | Professor, Malmo University

Markets are already on to this. But the Fed will soon be joined by other central banks in tightening policy. Where I spoke of policy divergence last September, now we can speak of policy convergence.... Of course, the zombies will get it wrong as usual. Credit Writedowns Global Policy ConvergenceEdward Harrison

Lender-of-last-resort operations by central banks (or "bailouts of the financial system") are deservedly unpopular across the political spectrum. Malcontents have argued that risky lending ought to be handled by markets, and that deposits should be fully backed by reserves or Treasury bills. Unfortunately, the believers in these theories never bother to look at the economics of short-term lending. The money markets have the structure that they have for a reason, and they only will function...

Germany looks to the future. Uncle Sam won't be pleased. HSBC chief executive Stuart Gulliver, speaking at the same conference in Hong Kong, said that the Belt and Road Initiative (BRI) will increase the usage of RMB even further. China’s central bank announced new measures earlier this month to encourage cross-border yuan transactions in support of BRI projects. Asia TimesGerman central bank to add RMB to currency reserves: Follows ECB’s move to include China’s currency last year

Opening remarks by Mr Carlos da Silva Costa, Governor of the Bank of Portugal, at the Bank of Portugal Conference on Financial Stability, Lisbon, 17 October 2017. Bank of International SettlementsCarlos da Silva Costa: Opening remarks - "Conference on Financial Stability"