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The Risk Telescope — The Day After

March 11, 2012 by BCM International Regulatory Analytics   Comments (0)

A collective sigh of relief is nearly audible this weekend.  At least one set of contractual obligations (credit default swaps) will be honored on time, in full, and in the manner anticipated when the contracts were written.  The months-long anticipation of this event, paired with generous (3-year) bank liquidity support by the European Central Bank and the direction of official sector support for European banks through the second bailout for Greece, means that paying out on these contracts will not be as catastrophic as would have been the case last year.


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The Finanser's Week: 5th March - 11th March 2012

March 11, 2012 by skinnercm   Comments (0)

Our biggest stories of the week are ...


International Journal of Central Banking - March Issue [BIS]

March 11, 2012 by CentralBankNews   Comments (0)

The Bank For International Settlements [BIS] recently released the March issue of the International Journal of Central Banking [IJCB].  The March issue features articles on exchange rate stabilization and the so-called 'Dutch disease', DSGE Models, the use of Reserve Requirements for price and financial stability, The Fed as an informed forex trader, central banking in an open economy, the dynamics of food price pass-through and inflation, the impact of growth in the BRIC economies on inflation in the G-7, and the effect of import prices on inflation.

March Issue Introduction paragraphs:
Many of the advances in monetary policy analysis over the past two decades have been developed from the perspective of a large open economy. The early theoretical work on the New Keynesian model frequently ignored exchange rates, financial capital flows, and trade flows. This neglect carried over into the first generation of DSGE models that were taken to the data and used for policy experiments. When open-economy versions of New Keynesian models were developed, they generally assumed perfect capital mobility and uncovered interest parity. 

While these assumptions allowed the models to address some issues relevant for open economies, they were often not well suited for investigating policy issues in small open economies where financial markets were not fully integrated into world capital markets, and where domestic financial markets were underdeveloped. Standard models also restricted attention to interest rates as the sole instrument of monetary policy, ignoring the role that exchange rate controls, monetary aggrates, and required reserve ratios play as policy instruments in many emerging-market economies.
See the March issue of the International Journal of Central Banking:
BIS website or IJCB website
About the IJCB:  
The International Journal of Central Banking (IJCB) is an initiative of the central banking community.  Published quarterly, the journal features articles on central bank theory and practice, with a special emphasis on research relating to monetary and financial stability. The main objectives of the International Journal of Central Banking are:
-to disseminate widely the best policy-relevant and applied research that reflects the missions of central banks around the world across a range of disciplines; and
-to promote communication amongst researchers both inside and outside of central banks.
The journal's sponsoring institutions are committed to ensuring that the IJCB offers articles of high analytical quality for a professional audience. Both central bank and non-central bank economists are invited to submit papers for consideration.

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The History of the Personal Check [Infographic]

March 10, 2012 by CentralBankNews   Comments (0)

The below infographic details the history of the personal check (also known as cheque), an instrument which has been a pivotal component of historical and modern banking, and the payment system.  While checks have become marginalized and even phased out in some countries, in preference of electronic payment systems, checks and related financial instruments (e.g. letters of credit, bills of exchange, bearer bonds, etc) remain an important tool in financial transactions and arrangements.  Central banks often have oversight of the payment system, particularly where the central bank has banking system regulatory responsibilities, and may play a role in regulating the form and function of checks, and the clearing and processing of check based payments.

History of Personal Checks" style="border-bottom-style: none; border- border-image: initial; border-left-style: none; border-right-style: none; border-top-style: none; border-width: initial;" />

Infographic source:

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Monetary Policy Week in Review - 10 March 2012

March 9, 2012 by CentralBankNews   Comments (0)

The past week in monetary policy and central banking saw just one central bank change interest rates, with Brazil cutting rates 75 basis points to 9.75%.  Meanwhile those that held interest rates unchanged were: Australia 4.25%, Kenya 18.00%, Poland 4.50%, New Zealand 2.50%, EU 1.00%, UK 0.50%, Korea 3.25%, Serbia 9.50%, Peru 4.25%, Canada 1.00%, Malaysia 3.00%, and Indonesia 5.75%.  The Reserve Bank of India also made headlines, cutting its Cash Reserve Ratio by 75 basis points to 4.75%.

Looking at the central bank calendar, the main event next week is the US Federal Reserve's FOMC (Federal Open Market Committee), Wall Street will be watching the release closely for any signs of further Quantitative Easing e.g. "QE3" or even sterilized quantitative easing. The Bank of Japan meeting and Swiss National Bank meetings will also be worth watching.

Bank of Japan
United States
Federal Reserve
Norges Bank
The Swiss National Bank
Reserve Bank of India
Banco de Mexico

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Bank Indonesia Pauses BI Rate at 5.75%

March 9, 2012 by CentralBankNews   Comments (0)

Indonesia's central bank, Bank Indonesia, held the BI rate unchanged at 5.75%.  The Bank said: "To control short-term temporary inflation pressure, the policy will be focused on strengthening monetary operation and managing short term excess liquidity. Besides strengthening policy coordination with the government at national level as well as at regional level through TPI and TPID forums. Although there is a tendency of inflation to go beyond the target due to temporary impact of government policy on fuel subsidy, with various policy implemented by Bank Indonesia and the coordination with the government, Bank Indonesia is confident that inflation in 2013 will return to its range of 4.5% ±1%."

The Bank cut the rate by 25 basis points at its previous meeting, and cut the interest rate by 50 basis points at its November 2011 meeting, and also cut the key monetary policy rate (the BI Rate) by 25 basis points to 6.50% at its October meeting.  Previously the Bank raised the BI rate by 25 basis points to 6.75% in February 2011.  Indonesia reported annual inflation of 3.56% in February, compared to 3.7% in January, 4.1% in November, 4.61% in September, 4.79% in August and July, 4.61% in June, 5.98% in May, 6.16% in April, and 6.65% in March, and just below the inflation target of 5% +/-1% in 2011 (which changes to 4.5% +/-1% in 2012).  

Bank Indonesia has previously forecast GDP growth of 6.3-6.8% in 2011 and 6.4-6.9% in 2012 for the Indonesian economy, meanwhile Indonesia reported annual GDP growth of 6.5% in the June quarter last year. The Indonesian Rupiah (IDR) has weakened by about 5% against the US dollar over the past year, while the USDIDR exchange rate last traded around 9,135.  Bank Indonesia next meets on the 12th of April this year.

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Bank Negara Malaysia Holds Overnight Policy Rate at 3.00%

March 9, 2012 by CentralBankNews   Comments (0)

The Bank Negara Malaysia kept its Overnight Policy Rate (OPR) steady at 3.00%.  The Bank said: "Headline inflation is expected to moderate in 2012. Nevertheless, upside risks to inflation could emerge arising from the risk of supply disruptions and the possible financialisation in commodity markets, which would result in higher energy and commodity prices. In the MPC's assessment, while global financial conditions have improved, downside risks to the global economy remain. The high global commodity prices continue to pose risks to inflation. The MPC will continue to carefully assess these evolving conditions and their implications on the overall outlook for growth and inflation."

The Bank Negara Malaysia previously kept the rate unchanged at its February meeting, and last increased the OPR by 25 basis points to 3.00% in May last year, it also increased the Statutory Reserve Requirement (SRR) by 100bps to 3.00% at that meeting, and increased the SRR again in July by 100bps to 4.00%.  Malaysia saw inflation of 2.7% in January, down from 3.4% in September, 3.3% in August, 3.4% in July, 3.5% in June, 3.3% in May, 3.2% in April, and 3.0% March.  

The Malaysian economy grew 3.7% in the September quarter, up from 2.8% in the June quarter, compared to -2.8% in the March quarter (+1.5% in Q4 2010), while growing 5.8% on an annual basis compared to 4.3% and 4.9% in the previous quarters (4.8% in Q4 2010).  Malaysia's currency, the Malaysian ringgit (MYR), has gained about 1% against the US dollar over the past year, while the USDMYR exchange rate last traded around 3.01

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Semantic Web Jobs: mZeal Communications

March 9, 2012 by Jenz514   Comments (0)

mZeal Communications is looking for a Semantic Engineer in Laurel, MD. Required qualifications for the position include: “Minimum of five (5) years working on engineering projects for government or industry customers, demonstrating increasing levels of technical expertise and responsibility. Within the last five (5) years, at least three (3) years experience programming in Java. Within the last five (5) years, at least two (2) years working in a Linux environment. Within the last three (3) years, at least one (1) year experience supporting a project using standard relational and object-oriented modeling and constraint languages. A minimum of one (1) year experience designing, coding, testing, and debugging software using RDF Schema and query languages (preferably SPARQL).” continued…


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