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Bank of England Research @BoE_Research
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[THREAD] SWP 751 by Michalis Vasios (BoE), @GinoCenedese (@FulcrumAsset), Angelo Ranaldo (@HSGStGallen) looks at how recent reforms to OTC derivatives have affected how interest rate swaps are priced, uses transaction level trade repository data.
bankofengland.co.uk/-/media/boe/fi…
2/ Paper looks at USD denominated fixed-to-floating IRS contracts between 2014-16. Trades more likely to be centrally cleared when they have larger notional value, longer maturity and involve dealers, banks or hedge funds.
3/ Authors find evidence of heterogeneity in swap pricing. Clients pay a higher price to buy interest-rate protection from a dealer if the contract is not CCP cleared. Premium decreases by posting initial margin and with buyer's creditworthiness. Premium is absent for dealers.
4/ Paper has several policy implications. A higher price of non-CCP swaps should incentivise investors to switch to central clearing, which authors think should reduce systemic risk. It also provides insights into the so-called valuation adjustments (XVA) practice
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[THREAD] SWP 761 by Zoltan Jakab + Michael Kumhof argues the standard economic model of banks as intermediaries of loanable funds is wrong. It misrepresents what banks do + doesn’t fit stylised facts about balance sheets + propagation of financial shocks.

bankofengland.co.uk/working-paper/…
2/ Most economic models assume banks are “intermediaries of loanable funds”(ILF): i.e. savers turn up at branches with funds to deposit, which a bank then lends on to borrowers. In this view banks don’t create credit, they just channel existing funds from savers to borrowers.
3/ In practice, banks can make loans by financing through money creation (FMC): i.e. they can loan money without having any pre-existing savings. The bank just creates a new liability (the new funds in borrowers account) + corresponding asset (the new loan on its lending book).
Read 7 tweets
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[THREAD] SWP 724 by Ben Dyson, Jack Meaning, James Barker and Emily Clayton explores how a central bank digital currency (CBDC) might affect the monetary transmission mechanism (MTM).
bankofengland.co.uk/working-paper/…
2/ If a CBDC is just a payment instrument that doesn’t pay interest, then it only really competes with cash. If it also pays interest, then it starts to compete with bank deposits. Then it starts to have implications for price and volume of bank funding. And therefore the MTM.
3/ Assumes central bank sets interest rate on CBDC. This becomes
floor on all other rates in the economy b/c CBDC is safest store of value +
also provides transactional services, no-one else would want to lend to non-CB agents at lower than CBDC rate.
Read 6 tweets
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[THREAD] Ambrogio Cesa-Bianchi (BoE & @CFMUK), @APFerrero (Oxford) and @arebucci1 (@JHUCarey ): “International Credit Supply Shocks”, Journal of International Economics (forthcoming). Looks at global banks’ leverage as source of domestic boom-bust cycles. sciencedirect.com/science/articl…
2/ Evidence consistent with global financial cycle hypothesis. Global banks’ leverage shocks account for 15% of variation in cross-border bank credit, and explain 10% of variation of domestic consumption: in line with what typically explained by domestic monetary policy shocks.
3/ Impact of external shock varies across countries: bigger with higher maximum LTV ratios, higher shares of foreign currency debt, lower capital controls, and fixed exchange rates. sciencedirect.com/science/articl…
Read 3 tweets

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Hon. Minister, @AuduOgbeh yesterday appeared on the programme "Good Morning Nigeria" on NTA to talk about some of the achievements in the agricultural sector under President @MBuhari's administration and the outlook for 2019. Here are some highlights of the conversation. #Thread
1. On local production of fertilizer:

We are blending our own fertilizer especially the NPK. The number of blending plants in Nigeria rose from 12 to 27. We now have more fertilizer than we consume, with a surplus of nearly 400,000 tonnes in the warehouses - @AuduOgbeh
2. Bank of Agriculture/Access to credit:

We are strengthening the Bank of Agriculture with the ultimate aim of bringing the interest rate in agriculture to 5% and targeting a capital base of N250billion. - @AuduOgbeh
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#Thread In 2016, @farmaajo run on a campaign of change and reform; and made a case for a fight against corruption & cronyism which has crippled governance in Somalia. Since his win, a myth of change and reform has been created despite an overwhelming evidence to the contrary.
Rather than fight against the entrenched the status quo @M_Farmaajo has in fact helped in deeply entrenching Somalia’s unsustainable rent-seeking elite.
One of @M_Farmaajo main election selling point has been his promise to appoint a lean and efficient technocratic cabinet. Since coming to power, in a desperate attempt of self-preservation, @M_Farmaajo has stuffed his government with almost 100-MPs.
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#Thread: Our chair Omingo Magara articulated The Centre for Multiparty Democracy's memorandum to the Building Bridges to Unity Advisory Taskforce consultative meeting with stakeholders held today at the Kenyatta International Convention Centre. #BuildingBridges
The Building Bridges to a New Kenyan Nation is premised on the fact that Kenya has made progress towards consolidating its democratic landscape, but much remains to be done in addressing underlying challenges that threaten political, social and economic standing of the country.
Our democratization process and stability have been characterized by challenges that are well outlined in the Joint Communique of March 9th 2018 by H.E. the President Uhuru Kenyatta and the former Prime Minister Rt. Hon. Raila Odinga.
#BuildingBridges
Read 51 tweets
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#Thread: Press Conference today regarding TheEastLight's recent events regarding the band's abuse and assault by Producer A and CEO KimChanghwan "B" (leader Lee Seokcheol) and his lawyer at Choyeongrae Hall
(181019)
Lee Seokcheol shares that both he and his brother, Lee Seunghyun have endured being beaten by Producer A

Lee Seokcheol shared that Kim Changhwan, their CEO, was aware of the situation and would watch the two of them be beaten up in the 5th floor studio
Seokcheol shares for the past 4 years, beginning in 2015, he and the members would be clubbed by a baseball bat, the abuse would occur everywhere within the company, studios, practice rooms
Read 37 tweets
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#Thread

STATE HOUSE PRESS RELEASE:

The Presidency rejects allegations of opposition politicians, as well as some newspaper editorial opinions creating the impression that President Buhari is against the use of card readers in the upcoming elections,... (Cont’d)
... hence his decision to decline assent, for the 3rd time, to the Electoral Act (Amendment) Bill 2018.

We wish to state in clear & unambiguous terms that the issue of e-voting and use of card readers was NEVER an issue for the President’s decision to decline assent to the Bill.
It is equally important that this issue was not raised either by the Executive or the Legislature in the recent reviews. Moreover, the Independent National Electoral Commission (INEC) adoption of e-voting reforms is enshrined in the 2015 Amendment Act to the Electoral Reform Act.
Read 13 tweets
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Here are my favorite quotes from this amazing book. #THREAD
1. "Bitcoin can be best understood as distributed software that allows for transfer of value using a currency protected from unexpected inflation without relying on trusted third parties"
2. "While Bitcoin is a new invention of the digital age, the problems it purports to solve - namely, providing a form of money that is under the full command of its owner and likely to hold its value in the long run - are as old as human society itself"
Read 137 tweets

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