ECB: "MONETARY POLICY IN EXCEPTIONAL TIMES"


ECB: "BANK RISK-TAKING, SECURITIZATION, SUPERVISION AND LOW INTEREST RATES EVIDENCE FROM THE EURO AREA AND THE U.S. LENDING STANDARDS"


CBO: "The Economic Outlook and Fiscal Policy Choices"


"The Great Recession and the Great Depression: Reflections and Lessons"


IMF WEO: "Will It Hurt? Macroeconomic Effects of Fiscal Consolidation"


IMF WEO: "Do Financial Crises Have Lasting Effects on Trade?"


BIS: "The evolving renminbi regime and implications for Asian currency stability"


Fed: "Can Banks Provide Liquidity in a Financial Crisis?"


ECB: "Beyond ROE - How to measure bank performance"


IMF: "The Uses and Abuses of Sovereign Credit Ratings"


ECB: "FORECASTING AND ASSESSING EURO AREA HOUSE PRICES THROUGH THE LENS OF KEY FUNDAMENTALS"

Eoin Treacy's view I found this section from the BIS report on the Renminbi exchange rate of particular interest:

We read the evidence from mid-2006 to mid-2008 to suggest that considerable intra-Asian exchange rate stability can arise from each country's managing its exchange rate against its own trade-weighted basket. Explicit cooperation could build on such implicit cooperation.

When the RMB, the ringgit and the Singapore dollar were all managed against their trade-weighted baskets, their exchange rates against each other were stabilised. This stability arose because of the similarity of their trade-weighted baskets. In principle, there are differences, of course. Malaysia and Singapore are big trading partners so the ringgit and the SGD baskets put bigger weights on each other's currencies than does the RMB basket. In practice, however, the weights are not so different as between the RMB and, say, the ringgit (Graph 4). The RMB has a higher weight on the Korean won, while the ringgit has a higher weight on Malaysia's ASEAN trading partners. But both put something like a half weight on the three major currencies and a third weight on regional currencies. As a result, in mid-2006 to mid-2008, the RMB/MYR cross-rate traded in a fairly narrow band (Graph 8, left-hand panel). Again plotting the least squares trend line and placing bands of ±2% around it,15 the overwhelming share of observations fall within the bands. Similar observations apply to the case of the Singapore dollar (Graph 8, right hand panel).

Asian countries share a great deal of interest in each others' exchange rates because their respective manufacturers compete against each other for market share both regionally and globally. When the Renminbi's peg to the US Dollar is loosened, it relieves a certain amount of pressure from Asian authorities who are seeking to moderate the appreciation of their own currencies both against the Renminbi and the Dollar.

The Asian Dollar Index has recouped almost its entire 2008 decline and is somewhat overextended relative to the 200-day MA, as it tests the peak near 116. The recent period of widespread US Dollar weakness is weighing on just about all of its trading partners and governments are beginning to complain both about the speed of the greenback's decline and the absolute level it is trading at.

While the Asian Dollar Index's uptrend remains consistent, the risk of a mean reversion is increasing. The first clear downward dynamic sustained for more than a day or two will probably signal the onset of such a corrective phase,

If the value of the US Dollar can be used as a measure of the global carry trade, where the USA offers a cheap source of credit for investments in higher yielding or strongly performing assets globally then currency indices relating to some of the best performing assets offer a valuable window on investment flows.