Banking, Central Banks, and Global Economy
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”
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”
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”