March 31, 2023
United States:
Collins Says History Shows Fed Must Stay Course on Inflation
Federal Reserve Bank of Boston President Susan Collins said that there’s “more work to do” to bring inflation down and that while “we’re likely to see at least some” credit tightening as a result of recent banking turmoil, it will be important to monitor the data.
“What history has told us is that you need to have conditions sufficiently tight and then really hold the course” to quell inflation, Collins said in an interview Friday on Bloomberg Television with Michael McKee.
Europe:
Europe Wants to Make It Easier to Wind Down Medium-Sized Banks
The European Union wants to make it easier to wind down medium-sized banks that fail by tapping national deposit guarantee systems for funding, according to people familiar with the matter.
In a proposal due around mid-April, the European Commission would facilitate using these funds to bridge gaps at banks that don’t have sufficient reserves and avoid tapping uninsured depositors, said the people, who asked not to be named because the plan isn’t yet public. The option would be limited to banks that will leave the market, the people added.
Asia:
IMF Says BOJ Should Avoid Hasty Exit, Provide Rate Guidance
The International Monetary Fund said the Bank of Japan should avoid a premature exit from monetary easing and outline conditions for raising its negative interest rate in order to improve its communication.
“Any changes to monetary policy settings will need to be well communicated to facilitate smoother transitions and protect financial stability,” the fund said Friday at the conclusion of its latest Article IV consultation report on Japan. Abrupt policy framework change would impose risks on the economy, it said, as the central bank headed for its first governorship change in a decade.
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