central banks


ECB-new

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?)


Fed2

The Central Banks’ Confusion

Larry Summers has written a perceptive analysis about the Fed’s confusion (and that of all the central banks, by the way) over what they are doing. Last Wednesday he made a brief reference to the FOMC’s decision not to raise rates, with the Fed once again being forced to withdraw from its previous plan of action. The total failure of ‘forward guidance,’ which has only served to make the Fed’s prose even more tedious to hide their misgivings.


The Fed should act now

The Data Is Fed-Dependent

James Alexander via Historinhas | The Federal Reserve and other central banks like to see themselves as “data-dependent”. They sit in objective judgement of the facts of the economy as revealed by “data” and then portentously decide whether to attempt to alter the future facts with monetary tightening or loosening.


historinhas

Group-Think Within And Amongst Central Banks

James Alexander via Historinhas | A new book has just been released on problems with central banks. The best chapter looks like the one on group-think. John Taylor, one of the book’s editors describes it thus: “Kevin Warsh’s (ex-FOMC member) report on the lack of effective deliberations at the FOMC is one of the most surprising parts of the book.



draghi-yelln

A Tale Of Two Central Banks

Both main central banks face a challenging outlook. The ECB may have saved the day recently by showing it still commands enough firepower to support the economy, even if its room for manoeuvre seems hopelessly narrow. The Federal Reserve seems caught in a nasty trap.