Banking, Central Banks, and Global Economy
Speaking at the UBS High-level Discussion on the Economic and Monetary Policy Outlook, held in Zurich on 27 May 2020, Agustín Carstens, General Manager, Bank for International Settlements, discussed the economic impact of Covid-19, and policy response of advanced economies’ central banks. Continue reading “Covid-19: An induced coma for the global economy”
The World Bank has appointed Carmen Reinhart as its new Vice President and Chief Economist, effective from 15 June 2020. Announcing the decision, David Malpass, World Bank Group President said, “Carmen has dedicated her career to understanding and surmounting financial crises in both advanced and developing economies in order to achieve growth and higher living standards. Her thought leadership during this unprecedented period will be invaluable to the Bank Group and our clients.” Continue reading “Carmen Reinhart at the World Bank”
Joe Rennison and Robert Smith report in today’s Financial Times (14 May 2020) that the Collateralised Loan Obligations (CLO) which have been booming and has helped the rise of private equity, could become vulnerable if the level of corporate defaults rise in the current context of Covid-19 pandemic. Continue reading “CLOs: Stress points in times of Covid-19”
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”
Nouriel Roubini, economist at the New York University’s Stern School of Business, was one of the in his post on Project Syndicate (www.project-syndicate.org) dated 28 April 2020, was one of the very few who credibly predicted (there are many claimants) the financial crisis and great recession of 2007-09. So, when he predicts a Greater Depression of the 2020s, as against the Great Depression of 1929-33, one takes notice. Continue reading “Roubini on the “Greater Depression” of the 2020s”
(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”