The secular decline in the global equilibrium real interest rate

A new Bank of England paper finds a 450 bps decline in global equilibrium real interest rates over the past 35 years, due to a...

ECB asset purchases: the three transmission channels

A new paper suggests that ECB asset purchases influence markets and the economy significantly, mainly through three channels. First, through the asset valuation channel...

The ECB and the option of large-scale asset purchases

Large-scale asset purchases have become a plausible policy option for the European Central Bank. A BNP research report suggests that an initial meaningful program...

U.S. Fed: Why replacement of “operation twist” with outright bond purchases...

JP Morgan’s Nikolaos Panigirtzoglou presented a nice reasoning, why the December 12 2012 U.S. Fed decision to replace its maturity extension program with outright bond...

Liquidity regulation and monetary policy

From 2015 banks will have to satisfy new liquidity standards. Of particular importance is the liquidity coverage ratio, which requires institutions to hold enough “high...

A brief history of monetary policy and asset price booms

A new NBER paper reminds us of historical episodes when loose monetary policy contributed to asset price booms and busts. The paper also provides...

The role of macroprudential policy

Macroprudential measures are often seen as a counterweight to ultra-easy monetary policy in the developed world. BIS research cautions against this expectation. Macroprudential policies are...

An ECB review of forward guidance

The ECB has reviewed its own forward guidance in a global context. Forward guidance uses communication to add monetary accommodation at the zero...

An updated guide to ECB non-conventional monetary policy

The ECB now runs one of the most complex monetary policy regimes. Beyond regular liquidity supply, its operating framework features long-term full-allotment refinancing operations, generous collateral acceptance,...

Setback risks for international USD lending

The BIS annual report emphasizes the dollar’s pervasive influence on international financial conditions. Post-crisis non-conventional Fed easing has spurred a global credit expansion, including...

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Macro factors of the risk-parity trade

Risk-parity positioning in equity and (fixed income) duration has been a popular and successful investment strategy in past decades. However, part of that success...

Identifying market regimes via asset class correlations

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