central banks

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.



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.


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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.