Identifying Supply and Demand Shocks in the South African Economy 19602020
South African Reserve Bank Working Papers by Johannes W. Fedderke
A tail of three occasionally-binding constraints: a modelling approach to GDP-at-Risk
Bank of England Working Papers by David Aikman, Kristina Bluwstein and Sudipto Karmakar
Fiscal and monetary policy interactions in a low interest rate world
We analyse fiscal and monetary policy interactions when interest rate policy is hampered by the zero lower bound (ZLB) in an environment where expectations are formed with perpetual learning.
Covid-19 and bank resilience: where do we stand?
A forward-looking view on bank resilience can be obtained through a combination of regulatory capital ratios, market valuations and insights from stress tests. Banks appear to have avoided the losses that once seemed likely given the severity of the pandemic shock, due in large part to policy support. While market valuations have largely recovered to pre-pandemic levels, a weaker tail of banks continues to struggle with anaemic profitability and potential for credit losses. The resilience of these banks could be tested if credit losses materialise following the winding down of policy support.
Quantitative Analysis of the Impact of Floods on Firms' Financial Conditions
Bank of Japan Working Papers by Hiroki Yamamoto and Tomomi Naka
Global reflation ?
Inflation has risen in many countries. In conjunction with a rebound in GDP growth and evidence of significant bottlenecks in some sectors, this has prompted concerns that the low inflation era of recent decades could be nearing its end. A closer look at the data reveals that the pickup in inflation can be ascribed largely to base effects, increases in the prices of a small number of pandemic-affected items and higher energy prices. A common thread through these causes is that their effect on inflation is likely to be temporary. A more persistent increase in inflation would likely require a material pickup in labour costs and an unmooring of inflation expectations. However, wage growth remains contained and the medium-term inflation expectations of professional forecasters and financial markets show little sign of de-anchoring. These developments are consistent with medium-term inflation moving towards central bank targets.
Stress-testing banks for climate change – a comparison of practices
FSI Insights No 34, July 2021. This paper discusses the challenges that emerge when trying to adapt traditional stress tests to banks’ climate-related risks. These challenges relate to: (i) data availability and reliability; (ii) the adoption of very long time horizons; (iii) uncertainty around future pathways of key reference variables covering physical risks (eg floods, temperature increases and rising sea levels); and (iv) uncertainty relating to transition risks (eg changes in climate policies, technologies or consumer preferences).
Fintech and the digital transformation of financial services: implications for market structure and public policy
Economic frictions such as information asymmetries and economic forces such as economies of scale and scope give rise to financial intermediaries. These frictions and forces also shape market structure. While technological advances are not new to finance, digital innovation has brought major improvements in connectivity of systems, in computing power and cost, and in newly created and usable data. These improvements have alleviated transaction costs and given rise to new business models and new entrants. …
Supplementary Paper Series for the “Assessment” (3): Inflation-Overshooting Commitment:An Analysis Using a Macroeconomic Model
Bank of Japan Working Papers by Takuji Kawamoto, Jouchi Nakajima and Tomoaki Mikami
Central bank digital currencies for cross-border payments
Joint report to the G20 by the Committee on Payments and Market Infrastructures, the BIS Innovation Hub, the International Monetary Fund (IMF) and the World Bank. The report analyses how CBDCs could facilitate enhanced cross-border payments, and how practical efforts are taking these considerations forward.