Banking, Central Banks, and Global Economy
Posts related to central banking
Philip Lowe, Governor of Reserve Bank of Australia since 2016, in his speech on 24 April 2020, gave an update on the economic and financial condition in Australia in the context of the Covid-19 pandemic. Continue reading “Philip Lowe on Australia’s response to the pandemic”
Stephen S. Poloz, Governor of Bank of Canada since 2013, stated in his speech on 4 May 2020 that the pandemic offers a “teachable moment”. He lists the following as lessons for central banking from this teachable moment: Continue reading “Stephen S. Poloz on the “Teachable moments” from the pandemic”
(Note: A much shorter version of this article appeared in Mint dated 13 July 2020. You can read it here.)
In 1872, when Phileas Fogg, Jules Verne’s enigmatic character, wagered with his whist partners at the Reform Club, including an Assistant Governor of the Bank of England, to travel round the world in eighty days, he issued a cheque for £20,000, drawn on Baring Brothers. That was security enough. That was the standing of Baring Brothers, which always paid his cheques “on sight and his account remained invariably in the black.” Moreover, he was accepted as a member of that distinguished society on the recommendation of Baring Brothers with whom he had an unlimited overdraft limit. Continue reading “25 years after Barings: Have the lessons been learnt?”
The IMF released yesterday the first chapter of its half-yearly Global Financial Stability Review (GFSR) for April 2020. The GFSR “provides an assessment of the global financial system and markets, and addresses emerging market financing in a global context. It focuses on current market conditions, highlighting systemic issues that could pose a risk to financial stability and sustained market access by emerging market borrowers. The Report draws out the financial ramifications of economic imbalances highlighted by the IMF’s World Economic Outlook.” Continue reading “IMF’s Global Financial Stability Review, April 2020: Markets in the Time of Covid-19”
The IMF released yesterday the first chapter of its half-yearly World Economic Outlook (WEO) which is due only in May/June 2020. The world has changed significantly since the publication of the last WEO in January this year. The Great Lockdown, as the report calls it, will result in the worst recession since the Great Depression, shrinking the global economy dramatically by -3%, thus surpassing the effects of the Great Recession of a decade back. Continue reading “IMF’s World Economic Outlook, April 2020: Effects of the Great Lockdown”
On 9 April 2020, Jerome Powell, Chairman of the Federal Reserve Board, spoke at the Hutchins Center on Fiscal and Monetary Policy, The Brookings Institution, Washington, D.C. (via webcast) on Covid-19 and the Economy. Highlights of the speech: Continue reading “Powell on Covid-19 and the Economy”
The Federal Reserve on Thursday, 9 April 2020, took additional actions to provide up to $2.3 trillion in loans to support the economy. This funding will assist households and employers of all sizes and bolster the ability of state and local governments to deliver critical services during the coronavirus pandemic. Highlights: Continue reading “Federal Reserve provides additional support”
Noam Chomsky, the 91 year old “father of modern linguistics”, is also a philosopher, historian, cognitive scientist, activist, and at times also a political activist. He has often held views that were off-beat reflecting his original thinking. He was at one time one of the ten most cited authors in the world, ranking alongside the Bible, Shakespeare, and Karl Marx. So, when he takes a stand, one takes note, whether one agrees or not. In this interview, and this, he blames the corona pandemic on market failures. Specifically, the market’s inability to invest in research and equipment that will not rake in profits even though they could have long term benefits to the community. And there is a lot of truth in what he says. Market failures mean the government and regulators need to step in and step up.
© G Sreekumar 2021
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Tobias Adrian and Aditya Narain of the IMF, in their article titled “Maintaining Banking System Safety amid the COVID-19 Crisis” (31 March 2020), suggest how national band supervisors should respond to ensure continued trust and confidence in the banking system. Continue reading “Covid-19 pandemic and banking regulation”
Agustin Carstens, General Manager, Bank for International Settlements, in an op-ed piece in the Financial Times (30 March 2020), has raised concerns about the impact of the corona virus pandemic on global financial markets. Continue reading “Covid-19 pandemic: Dealing with the financial impact”