By Maurice Obstfeld and Haonan Zhou In May 2022, the Federal Reserve (Fed) announced that the process to reduce the size of its balance sheet would begin on June 1. With that process now underway, this post reviews the initial months of runoff. We also highlight publicly available resources that provide data to monitor the[…]
By Iñaki Aldasoro, Peter Hördahl and Sonya Zhu When financial markets come under pressure, vital functions such as the efficient allocation of capital and price formation become impaired. It is therefore important to enhance the monitoring and analysis of market conditions, in particular events that may put pressure on authorities to intervene. We introduce market[…]
By the European Central Bank (ECB) The climate crisis is one of the biggest challenges of our time. It poses severe risks for the economy and it affects price stability, our core mandate as a central bank. This is why we are committed to doing our part in the fight against climate change, within our[…]
by Claudia Buch Speech by Prof Claudia Buch, Vice-President of the Deutsche Bundesbank, at the 11th Biennial Irving Fisher Committee (IFC) Conference, Basel, 25 August 2022. Link: Time for structural change in central bank statistics? How to support the transition to a climate-friendly economy
The Global Financial Development Database is an extensive dataset of financial system characteristics for 214 economies. It contains annual data, starting from 1960. It has been last updated in September 2022 and contains data through 2021 for 108 indicators, capturing various aspects of financial institutions and markets. Please, be advised that the latest release presents[…]
By Maurice Obstfeld and Haonan Zhou Arising dollar—driven by the Federal Reserve’s inflation-quelling interest rate increases and investors’ diminished risk appetite—could cause downturns in many emerging market and developing economies (EMDEs), suggests a paper discussed at the Brookings Papers on Economic Activity (BPEA) conference on September 9. Link: The global dollar cycle
By Pamela Pogliani, Philip Wooldridge Cross-border financial centres (XFCs), which cater predominantly to non-residents, are important intermediaries of international financial flows. Considering the size and nature of XFCs’ activities, it is useful to distinguish them from other countries when analysing capital flows and interconnectedness. XFCs’ defining feature is that both their external assets and their[…]
By Giovanni Covi, James Brookes and Charumathi Raja How banks are exposed to the financial system and real-economy determines concentration risk and interconnectedness in the banking sector, and in turn, the severity of tail-events. We construct the Global Network data set, a comprehensive exposure-based data set of the UK banking sector, updated quarterly, covering roughly[…]
By Isabel Schnabel Monetary policy and good luck, that is smaller economic shocks, played an important role during the Great Moderation, a period of broad macroeconomic stability. Following the pandemic and the war in Ukraine, there are reasons to believe that policymakers will find themselves in a less favourable environment over the medium term –[…]
By Linda Goldberg, Fabiola Ravazzolo With the onset of the Covid-19 pandemic, the Federal Reserve, along with other central banks, deployed international global liquidity backstops to counter stressed market conditions. This column analyses the effectiveness of central bank swap lines and the Foreign and International Authorities repo facility. It finds that these facilities contributed to[…]