central banks


central-bankers

Central Banks Fail To Bolster Investors’ Spirits

The main global central bankers have conveyed reassuring market-friendly messages following their last meetings. The Fed pictured a rosy outlook of home growth and employment paving the way for a moderate rate rise in December. The ECB on its side signalled its firm commitment to conduct a more flexible and accommodative policy by strengthening its QE stance. Yet good news is failing to stiffen market sentiment.


janet-swearing

Fed: “Just Hike Rates”

Fernando Barciela | The Federal Reserve’s minutes which were released last Wednesday show that a rate hike is firmly on the cards for this December. But almost everybody seems to think that – if it happens – the rate increase probably will be small, a quarter of a percentage point at most. And, also very importantly, the pace of rate increases after that hike will be gradual. Before any further decision about future hikes the Fed will want to study the consequences.


Central-Banks-currencyTC

Offset here, offset there, offset everywhere

James Alexander via Historinhas | There is only monetary policy, defined as the value of money relative to real goods and services. All else is just tools: official short term policy rates, IOER, targeting or guidance, QE, fiscal policy. In the “monetary offset”, the tool of expansionary fiscal policy is offset if the overarching policy tool is inflation targeting.


BCE_SkylineFrankfurtTC

Look Who’s Leading The ‘Group Of 30’

The international consultative Group of Thirty (G30), whose members are central bankers and bankers from big private banks, has just released a report. They conclude much work remains ahead for governments and central banks to secure a solid recovery.



Former President of Bankinter Juan Arena

“Zero interest-rate policy means there are bubbles everywhere”

By Fernando Barciela | Board member at Ferrovial, amongst other Spanish listed companies, Juan Arena was President of Bankinter from 2002 to 2007.  “The crisis comes when assets prices drop. Then we have to choose between debt haircuts or raising asset prices via inflation and money printing,” he says.


The Fed should act now

The Fed should act now

The Fed’s wavering over addressing the matter of its announced rate hike has badly affected the markets, increasing their volatility. It should act now, curbing any further speculation, and disregard recent calls from the IMF and the World Bank to further delay this move.


Austrlia

Australia Tries to Find ‘Balance’

Being one of the very few countries (two others are Poland and Israel) whose monetary policy managed to avoid a recession on the heels of the 2008-09 crisis, Australia is a natural object of Schadenfreude!


central bank1

“Deflation Remains More of a Threat to Growth Than Low Interest Rates”

Are we putting the responsilibity of exiting the crisis on central banks’ shoulders? Is ECB’s president Mario Draghi doing traders a favour by playing down the ECB’s responsibility for contributing to volatility? Professor of Financial Mathematics at Bocconi’s University Marcello Minenna answers to these questions from Milan and argues that a low interest rate environment is here to stay.