PRA proposes reduced reporting requirements for banks
The Prudential Regulation Authority (PRA) has today announced proposals to reduce regulatory requirements for banks by deleting 37 individual reporting templates.
Financial institutions
Changes to the collection and publication of data on the further sectoral breakdown of non-resident business
This article details a consultation to discontinue the collection and publication of statistical data via Form BN on the further sectoral breakdown of non-resident monetary financial institutions. It also outlines existing alternative sources of non-resident data available in Forms CC and CL which can be used to substitute Form BN data, albeit on a quarterly rather than monthly frequency.
IFDP Paper: Core Inflation in the Advanced Economies: A Regional Perspective
Daniel O. Beltran and Julio L. OrtizWe explore differences in the dynamics of core inflation between Europe and North America using a Bayesian time series filter that decomposes the level of core inflation in the major advanced economies into regional, global, and country-specific components. We find a prominent role for both regional and global factors. Historically, the two regional components have at times diverged.
FEDS Paper: One Policy Rate, Many Stances: Evidence from the European Monetary Union
Manuel González-Astudillo, Diego VilánA challenge for conducting monetary policy in a currency union is the diverse economic conditions among member states. Such disparities can drive natural interest rates apart, thereby undermining the stabilizing role of a unified monetary policy.
FEDS Paper: Where's The Bank? Banking Access in the Era of Branch Consolidation
Robert M. Adams and Shane M. SherlundThis study examines changes in household and employment access to bank branches in the United States from 2014 to 2024, calculating distances with highly granular census block-level data. We develop a continuous measure of bank branch access that accounts for population and employment density, implicitly accounting for varying travel times within different urban and rural areas.
FEDS Paper: Non-homothetic Demand Shifts and Inflation Inequality
Jacob OrchardThis paper shows that adverse macroeconomic shocks systematically increase inflation for low-income households relative to high-income households. I document two key facts: (i) during every U.S. recession since 1959, aggregate spending shifts toward products disproportionately purchased by low-income households (necessities); and (ii) relative prices of necessities rise during recessions.
FEDS Paper: Attention-Dependent Monetary Transmission to Household Beliefs
Jaemin Jeong, Eunseong Ma, Choongryul YangWhen do households listen to the Fed? We show the answer lies in a simple but powerful force: household attention to macroeconomic conditions. We develop a model where attention acts as a crucial gatekeeper for the pass-through of policy news to beliefs, and confirm its predictions using household survey data.
FEDS Paper: Monetary Policy and Bank Funding Costs: Patterns and Predictability in the Transmission of the Policy Rate to U.S. Banks' Funding Costs
Daniel A. Dias; Sophia C. ScottThis paper shows that U.S. commercial banks' funding betas rise predictably with the length, magnitude, and direction of each monetary policy cycle: longer cycles and those with larger changes in the policy rate yield stronger pass-through in both tightening and loosening cycles, with modest asymmetry favoring slightly greater transmission during loosening cycles. Nondeposit liabilities consistently adjust more than deposits.
FEDS Paper: Do Banks Price Flood Risk in Mortgage Origination: Evidence from a Natural Experiment in New Orleans
David M. Arseneau and Gazi I. KaraThis paper uses a large-scale redrawing of flood zone maps for the City of New Orleans in 2016 to identify how banks respond to changes in perceived flood risk in residential mortgage origination. Using geo-coding, we separate loan-level data on mortgage originations into treatment versus control groups based on how individual properties were affected by the map changes.
FEDS Paper: Financial Structure and Mergers
Charles Taragin, Benjamin Wallace, Eddie WatkinsWe study how corporate debt influences the competitive outcomes of horizontal and conglomerate mergers. In contrast to standard models where debt does not affect pricing, our framework shows that mergers can spread fixed debt obligations across a broader product portfolio, creating an "insurance effect" against adverse demand shocks. This effect interacts with the traditional recapture effect from reduced competition.
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