Archive for June 21st, 2021

When central bank employees do equity transactions around monetary policy dates: Case of Sweden

June 21, 2021

Interesting press release from Sweden Central Bank:

In connection with a routine check of employees’ asset transactions, it has been noted that a few employees at the Riksbank have made transactions that are not in line with the Riksbank’s ethical regulations. However, it is a question of recurring savings and the employees themselves have reported the transactions on a regular basis in accordance with existing internal guidelines. The current events have concerned equity transactions shortly before monetary policy decisions and equity transactions in companies from which the Riksbank purchases corporate bonds for monetary policy purposes. This is inappropriate and therefore a number of measures have been taken, such as discussions with the employees concerned, clarification of internal information for everyone and also particular focus on educational initiatives. A revision of the regulations to improve clarity has also been initiated and will be completed before the end of 2021.

What are policies of other central banks regarding such transactions?

Voting right rotation, behavior of committee members and financial market reactions: evidence from the U.S. Federal Open Market Committee

June 21, 2021

Michael Ehrmann, Robin Tietz and Bauke Visser in this ECB paper analyse voting pattern in Federal Reserve:

Whether Federal Reserve Bank presidents have the right to vote on the U.S. monetary policy committee depends on a mechanical, yearly rotation scheme. Rotation is without exclusion: also nonvoting presidents attend and participate in the meetings of the committee. Does voting status change behavior? We find that the data go against the hypothesis that without the voting right, presidents use their public speeches and their meeting interventions to compensate for the loss of formal influence; rather, they support the hypothesis that the voting right makes presidents more involved. We also find that speeches move financial markets less in years that presidents vote. We argue that these discounts are consistent with their communication behavior.

Macro News and Micro News: complements or substitutes?

June 21, 2021

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