Millie
your market intelligence analyst
Search Results
Edit Save
2,470 results
Borrowing through domestic currency bonds has not insulated emerging market economies (EMEs) from the financial shock unleashed by Covid-19; EME local currency bond spreads spiked amid sharp currency depreciations and capital outflows. Portfolio investors face amplified losses as local currency spreads and exchange rates move in lockstep; their revised portfolio allocations in turn strengthen this correlation. EMEs with monetary policy frameworks that are equipped to address the feedback loop between exchange rate depreciation and capital outflows stand a better chance of weathering the financial fallout from the Covid-19 pandemic. To counter large stock adjustments in domestic bond markets, EME central banks may need to expand their toolki.
The cost of bank funding on money markets is typically the sum of a risk-free rate and a spread that reflects rollover risk, i.e., the risk that banks cannot roll over their short-term market funding. This risk is a major concern for policymakers, who need to intervene to prevent the funding liquidity freeze from triggering the bankruptcy of solvent financial institutions.
Given the historical persistence of economic activity, the reduction of GDP due to confinement measures is likely to drag on over several quarters. The total GDP shortfall could be as much as twice that implied by the direct initial effects of confinement. This persistence reflects in part two types of spillovers across countries. One is due to the risk that uncoordinated confinements lead to repeated virus outbreaks and confinements across the globe. Another is the more traditional trade and financial integration interlinkages. Economic spillovers and spillbacks across the major economic blocs are large. There is no immunity from the economic effects if the epidemic is controlled in only one or two regions. Countries should adopt confineme.
The Covid-19 pandemic has fanned public concerns that the coronavirus could be transmitted by cash. Scientific evidence suggests that the probability of transmission via banknotes is low when compared with other frequently-touched objects, such as credit card terminals or PIN pads. To bolster trust in cash, central banks are actively communicating, urging continued acceptance of cash and, in some instances, sterilising or quarantining banknotes. Some encourage contactless payments. Looking ahead, developments could speed up the shift toward digital payments. This could open a divide in access to payments instruments, which could negatively impact unbanked and older consumers. The pandemic may amplify calls to defend the role of cash - but a.
For a two-week period in mid-March 2020, government bond markets experienced uncharacteristic turbulence, sometimes selling off sharply in risk-off episodes when they would normally attract safe haven flows. Evidence in the US Treasury market points to forced selling of treasury securities by investors who had attempted to exploit small yield differences through the use of leverage. Even though government bonds are safe assets, large holdings by leveraged investors may detract from orderly market functioning and may necessitate interventions by the central bank.
This paper studies the effects of average inflation targeting (AIT) on macroeconomic stabilisation in the presence of a lower bound. AIT has recently attracted increasing attention as a possible alternative to currently prevailing inflation targeting frameworks, notably because of its "make-up" feature, whereby past inflation shortfalls are made up for by temporarily higher future inflation and vice versa.
This paper explores the record of central bank swaps to draw out four themes. First, this recent device of central bank cooperation had a sustained pre-history from 1962-1998, surviving the transition from fixed to floating exchange rates. Second, Federal Reserve swap facilities have generally formed a part of a wider network of central bank swap lines. Third, we take issue with the view of swaps as previously used only to manage exchange rates and only more recently to manage offshore funding liquidity and yields.

Financial Services

Business Issues

Companies - Public

Companies - Venture Funded

Financial Results

Global Markets

Global Risk Factors

Government Agencies

Information Technologies

Job Titles

Legal and Regulatory

Political Entities

Sources

Strategic Scenarios

Trends

Hints:

  • Actions
    • Bookmark and Share: Allows you to Bookmark the page for easy future retrieval and sharing with colleagues
    • Email: Opens a pop-up window where you can write a message to the recipient of the email
    • Copy URL: Copies the URL of the requested document for pasting in an email or other document
    • Previous Versions: Only shown if essentially the same document has been republished
  • Saved Searches and Alerts
    • Save your search for later viewing & updates by clicking the blue "Save" button to the right of the search box. 

Click here for more info on Search Results.