Bank for International Settlements

Mutual funds and safe government bonds: do returns matter?

Retrieved on: 
Thursday, April 25, 2024
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Key Points: 

    Survey on credit terms and conditions in euro-denominated securities financing and OTC derivatives markets (SESFOD) - March 2024

    Retrieved on: 
    Thursday, April 18, 2024
    Reproduction, European Central Bank, Bank for International Settlements, Commodity, Attention, Documentation, ECB, Liquidity, Insurance, Risk, Committee, Frankfurt, Bank, Internal, Table, Equity, Credit, OTC, Foreign, Interest, Intensity, ISDA, Government, Total, Eurosystem, Convertible, Palladium

    Survey on credit terms and

    Key Points: 
      • Survey on credit terms and
        conditions in euro-denominated
        securities financing and OTC
        derivatives markets (SESFOD)
        March 2024
        The Eurosystem conducts a three-monthly qualitative survey on credit terms and
        conditions in euro-denominated securities financing and over-the-counter (OTC)
        derivatives markets.
      • The survey questions are grouped into three sections:
        1.

        counterparty types ? credit terms and conditions for various counterparty
        types in both securities financing and OTC derivatives markets;

        2.

        securities financing ? financing conditions for various collateral types;

        3.

        non-centrally cleared OTC derivatives ? credit terms and conditions for
        various derivative types.

      • The survey focuses on euro-denominated instruments in securities financing and
        OTC derivatives markets.
      • For securities financing, the survey refers to the
        euro-denominated securities against which financing is provided, rather than the
        currency of the loan.
      • Reporting institutions should report on their global credit terms, so the survey is
        aimed at senior credit officers responsible for maintaining an overview of the
        management of credit risks.
      • SESFOD March 2024

        2

        March 2024 SESFOD results
        (Review period from December 2023 to February 2024)
        The March 2024 Survey on credit terms and conditions in euro-denominated
        securities financing and OTC derivatives markets (SESFOD) reports qualitative
        changes in credit terms between December 2023 and February 2024.

      • Looking at credit terms and conditions for the various types of non-centrally cleared
        OTC derivative, initial margin requirements increased slightly for all derivative types.
      • Survey respondents reported mostly unchanged conditions as regards the maximum
        amount of exposure and the maximum maturity of trades.
      • Moreover, they reported that the volume of valuation disputes had
        declined for all derivative types except credit derivatives.
      • The survey asked respondents to compare credit terms
        and conditions on the cut-off date for the March 2024 survey round (i.e.
      • Compared with the
        previous year, overall terms and conditions for securities financing and OTC
        derivatives transactions had eased somewhat across all counterparties, while credit
        standards for funding secured against various types of collateral and non-price terms
        in OTC derivatives markets were generally tighter.
      • Credit terms and conditions for various counterparty types in both
        securities financing and OTC derivatives markets
        Overall credit terms and conditions eased between December 2023 and
        February 2024 (Chart A).
      • The overall easing of conditions masked some
        heterogeneity between price and non-price terms, and across different types of
        counterparty, though reported changes were relatively small.
      • Credit terms and conditions for various types of non-centrally
        cleared OTC derivative
        Initial margin requirements increased slightly for all derivative types.
      • Meanwhile, they reported
        unchanged conditions for credit derivatives referencing sovereigns and commodities,
        as well as a slight deterioration for credit derivatives referencing corporates and
        structured credit products.
      • The survey asked respondents to compare the credit terms and conditions observed
        on the cut-off date for the March 2024 survey (i.e.
      • Compared with the previous year, overall terms and conditions for securities
        financing and OTC derivatives transactions had eased somewhat across all
        counterparties.
      • Survey respondents reported that non-price credit terms in OTC derivatives
        markets had tightened somewhat for almost all types of derivative relative to
        the previous year.

    Central bank digital currency and monetary policy implementation

    Retrieved on: 
    Thursday, April 18, 2024
    E41, Central bank digital currency, Atlantic Council, Research Papers in Economics, Remuneration, Norges Bank, People's Bank of China, Policy, Central Bank of Myanmar, Bank for International Settlements, Blog, Financial innovation, Sveriges Riksbank, Bank of Canada, Mechanics, Journal of Monetary Economics, Insurance, Bank of England, E42, Corridor, Quarterly Journal of Economics, Report card, Frankfurt, Appetite, American Economic Association, Digital rupee, Rosolin, RBI, PDF, Private, ECB, Committee, Inden, North Rhine-Westphalia, Bank, Canadian International Council, Social science, JEL, JMD, ECCB, Digital, Journal, Research, POC, European Central Bank, ENaira, M.A, Monetary economics, Section 5, Government, ISSN, The, Central bank, Finance, Buffer, Parliament, CBN, EONIA, Asset, ATM, Risk, International Monetary Fund, Interbank, Section 4, Ministry, Press release, Section 3, Human, Waterfall, Cryptocurrency, Economy, Swiss National Bank, PIB, Section 2, Conference, Reserve Bank, Reserve Bank of India, GBP, Progress, Road, American Economic Review, CBB, Digital currency, Agur, European Commission, International Settlement, Constraint, Money, Community business development corporation, City, Equivalence, Eligibility, Ministry of Finance, Report, Control, Civil service commission, EUR, Uncertainty, Eastern Caribbean Central Bank, Abadi, Rest, Reproduction, Fintech, IMF, Federal Reserve, LCR, Data
    Key Points: 

      Isabel Schnabel: The Eurosystem’s operational framework

      Retrieved on: 
      Wednesday, April 3, 2024
      Transfer, Pillar, Reproduction, Chauhan, Learning, Frankfurt, MRO, DFR, European, EONIA, APP, Treaty on European Union, Bank, PEPP, Research, Speech, Prejudice, ECB, Risk, Policy, Communication, Sveriges Riksbank, Bank of Canada, NBER, Climate change, Green, Journal, Level 1, Bank of England, European Central Bank, Large Value Transfer System, Remuneration, Uncertainty, Bank for International Settlements, Pressure, Environment, Columbia University, Sugo, Federal Reserve, Effectiveness, MLF

      This box investigates how households have responded to the 2021-23 inflationary episode using evidence from the ECB’s Consumer Expectations Survey.

      Key Points: 
      • This box investigates how households have responded to the 2021-23 inflationary episode using evidence from the ECB’s Consumer Expectations Survey.
      • The findings suggest that households have primarily adjusted their consumption spending to cope with higher inflation.

      Philip R. Lane: The economic outlook and monetary policy

      Retrieved on: 
      Wednesday, April 3, 2024
      Consensus, Momentum, Tax, MIR, BLS, Consensus Economics, Wealth, Domestic, IHS Markit, Next Generation, BIS, Transport, DFR, European Commission, Labour, Bank of Greece, BSI, Employment, S&P Global, Governance, Loan, ECB, House, Workforce, ESCB, Policy, Aes, NGEU, Imperial College Business School, Refinitiv, Manufacturing, Cargo, GDP, Index, Household, RHS, Real, Coronavirus, PMI, Disinflation, Confidence, Bank of France, SMA, Food, Competition (economics), Credit, Perception, CES, Economics, Persistent, Personal ordinariate, Disposable product, Bank for International Settlements, Government, SVAR, Growth, Energy, Common, Consensus decision-making, Bank, Rest, ILS, Bloomberg, HICP, IBoxx, Housing, Deutsche Bundesbank, Composite, Unit, Total, Phosphorus
      Key Points: 

      Debate on: Is the inflation surge over and what are the lessons for monetary policy?

      Retrieved on: 
      Wednesday, April 3, 2024
      Consensus, Momentum, Angelini, Tax, MIR, Exercise, Consensus Economics, BIS, DFR, Interest, APP, Labour, Policy, Bank of Greece, PEPP, BSI, ECB, Observation, Aes, Evolution, Refinitiv, Cargo, GDP, T2, Watcher, T3, Deutsche Bundesbank, LHS, Electricity, Projection, MMR, Real, T+2, Disinflation, Bank of France, SMA, Food, OIS, MFI, Perception, CES, Economics, Persistent, Bank for International Settlements, SVAR, Growth, MPE, Common, Consensus decision-making, Bank, XXIV, ILS, HICP, Bloomberg, RHS, BVAR, Elasticity, Unit, Lombard, Surface finishing

      Shocks to the shortages variable are constructed as deviations in the values from the sample mean.

      Key Points: 
        • Shocks to the shortages variable are constructed as deviations in the values from the sample mean.
        • Shocks to the vacancy-to-unemployment ratio (labour market variable) are constructed
          as the actual value minus the value in the fourth quarter of 2019.
        • ?Indirect impact of energy prices on non-energy inflation? is the sum of the indirect effects of oil,
          gas and electricity prices.
        • 3

          Historical
          Rubric comparison of inflation episodes in the euro area ? headline and core
          Headline

          Core

          (percentage points)

          (percentage points)
          Current euro area episode
          Past global episodes

          Current euro area episode
          Past global episodes
          2

          2

          0

          0

          -2
          -4

          -2

          -6
          -8

          -4

          -10
          -12

          -24

          -18

          -12

          -6

          0

          6

          12

          18

          -6

          24

          Months around inflation peak

          -24

          -18

          -12
          -6
          0
          6
          12
          Months around inflation peak

          18

          Sources: BIS, Eurostat and ECB calculations.

        • The dark blue line represents the latest developments in headline and core inflation for the euro area, relative to the October
          2022 peak.
        • Non-energy industrial goods inflation refers to a panel of all euro area countries, while services inflation refers to
          a panel of 30 AEs and 28 EMEs.
        • Month = 0 is when the headline inflation value is at the highest during that particular episode.
        • The dark blue line represents the latest developments
          in non-energy industrial goods and services inflation for the euro area, relative to the October 2022 peak.
        • unprocessed
          food and energy

          HICPX

          8
          3.0

          3.0

          2.5

          2.5

          2.0

          2.0
          1.5

          1.5
          1.0
          Feb-24

          Jul-24

          1.0
          Dec-24 Feb-24

          Jul-24

          8

          7

          7

          6

          6

          5

          5

          4

          4

          3

          3

          2

          2

          1

          1

          Adjusted
          measures

          Difference
          4

          3

          2

          1

          0
          0
          0
          Feb-24 Jan-23 Jul-23 Jan-24
          Jan-23 Jul-23 Jan-24
          Feb-24 Jan-23 Jul-23 Jan-24
          Feb-24

          Dec-24

          Sources: Eurostat, March 2024 ECB staff short-term inflation outlook, Consensus
          Economics, Bloomberg and ECB calculations.

        • The ?adjusted?
          measures abstract from energy and supply-bottleneck shocks using a large SVAR, see
          Ba?bura, Bobeica and Mart?nez-Hern?ndez (2023), ?What drives core inflation?
        • Notes: 5-days moving average risk-neutral
          probabilities of inflation implied by five-year and tenyear zero-coupon inflation options.
        • 16

          8

          12
          Quarters

          16

          20

          Policy
          Rubriccounterfactuals
          Interest rate under alternative
          counterfactuals

          Counterfactual impacts on
          Inflation

          (percentages per annum)

          (annual percentage change)

          Baseline
          Earlier and longer
          Earlier, longer and higher

          8

          Baseline

          7
          6
          5
          4
          3
          2
          1
          0
          -1
          2021Q4

          2022Q4

          2023Q4

          2024Q4

          Earlier, longer and higher

          10

          2

          8

          0

          6

          -2

          4

          -4

          2

          -6

          0

          -8

          -2

          2025Q4

          Earlier and longer

          Output gap

          (p.p.

        • The RHS chart displays the impact on inflation (first panel) and output gap (second panel) for each of the hypothetical alternative paths of the interest
          rate.
        • As a caveat, financial feedback loops as well as feedback loops between inflation expectations and inflation are not activated.

      US monetary policy is more powerful in low economic growth regimes

      Retrieved on: 
      Tuesday, April 2, 2024
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      Key Points: 

        Piero Cipollone: Modernising finance: the role of central bank money

        Retrieved on: 
        Saturday, February 10, 2024
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        The paper demonstrates how agreement-level data can be used to study drivers of aggregate negotiated wage growth, as well as monitor the breadth of wage increases and account for time-varying factors such as one-off payments, when assessing wage pressures.

        Key Points: 
        • The paper demonstrates how agreement-level data can be used to study drivers of aggregate negotiated wage growth, as well as monitor the breadth of wage increases and account for time-varying factors such as one-off payments, when assessing wage pressures.
        • Lastly, the paper shows that the new indicators can provide reliable signals about current and future developments of wage pressures in the euro area while also serving as important cross-checking tools for negotiated wage growth forecasts.

        Corporate vulnerabilities as reported by firms in the SAFE

        Retrieved on: 
        Friday, February 9, 2024
        Employment, Access to finance, Access, SME, Corporation, Bank, COVID-19, Growth, European Investment Bank, Vulnerable, Financial management, Literature, Journal, Bankruptcy, SAFE, Statistics, Index, Bank for International Settlements, Fornari, ECB, Probability, EIB

        The current rise in vulnerabilities identified in the SAFE is driven mostly by firms in industry, construction and trade and by large firms rather than by small and medium-sized enterprises (SMEs).

        Key Points: 
        • The current rise in vulnerabilities identified in the SAFE is driven mostly by firms in industry, construction and trade and by large firms rather than by small and medium-sized enterprises (SMEs).
        • Balance sheet data on firms in the SAFE confirm that corporate vulnerabilities have implications for their investment rate and employment growth.