central banks

central banks

Central Banks Face A Moral Dilemma With Monetary Normalisation

Of all the arguments I have heard against monetary normalisation, I would definitely highlight the potential destablising effect which it could have on some financial markets. And I am not emphasising this in a positive way: I sincerely believe that delaying a decision which can help reduce uncertainty in the medium and long-term to avoid a negative impact (which I think will be limited) in the short-term is, without any doubt, questionable.


Public debt doesn't cease

Living with a Debt Problem

J. L. M. Campuzano  (Spanish Banking Association) | Debt is essential for growth. And in fact, the Big Recession, which was sparked by the US subprime crisis, lies in the high level of debt generated during the previous decade known as the Great Moderation. So just as periods of expansion are favourable  for building up debt, this has to be adjusted during periods of recession (and depression).


government-concept

Should Governments Do Something About Growth?

Central bankers deserve praise for salvaging the economy when it was navegating rough waters. The massive liquidity glut they provided undoubtedly saved the day. Yet this funding bonanza seems unable to boost growth. We know that money doesn’t necessarily bring happiness. But now we discover, much to our dismay, that neither does it guarantee a full- steam recovery.


bancoscentrales

A Global Financial World (Or The Herd Instinct In The Markets)

J.L.M. Campuzano (Spanish Banking Association) | You will agree that the messages we are getting from the main central banks fuel more distrust than certainty. The scenario is complex. And part of this complexity comes precisely from the current uncertainty which translates into a greater correlation between the financial markets and assets at a global level.


Fed's balance sheet size

Have Monetary Policies Gone Global?

BoAML | Central banks have learned the power of global spillovers the hard way in recent years. This is particularly true for the Federal Reserve, which paused planned policy tightening after the taper tantrum in 2013 and again after the sharp US dollar appreciation in 2014 and early 2015. In both cases US financial conditions deteriorated appreciably and the Fed responded by signalling a more gradual normalization.




ECB on inflation

Are The Central Banks Getting It Wrong? (I)

J.L.M. Campuzano (Spanish Banking Association) | The central banks really need some new arguments for extending their current expansionary monetary policy. As well as for not withdrawing some of the existing measures. The alternative is to get carried away.



uncertainty

The Cost Of Uncertainty

J.L.M. Campuzano (AEB) | Little by little the markets are stabilising. Liquidity is improving and trading volumes are normalising (although they are still low…what is normal?)