Central Banks

Singapore’s safe-haven success stirs its own drama

18 Apr 2023

It is booming as a wealth management centre and has a runway for growth: the hub books a fraction of the funds that Switzerland does. But winning the confidence of ultra-rich Asians comes with a unique set of problems. The Lion City can manage some of those better than others.

Fed can find inflation silver lining in bank storm

14 Apr 2023

Financial turmoil has prompted lenders to tighten the purse strings. That helps the Federal Reserve to cool the economy but might starve firms of funds. The central bank can spend up to $3 trln to combat a credit crunch without lifting consumer prices. It may need a lot less.

Central bank pilots risk leaving cockpit too soon

14 Apr 2023

Western policymakers at the IMF Spring Meetings hinted that their mission to slay inflation without a recession is nearly accomplished. Investors agree, and hope for rate cuts. That’s overdone. A soft landing is in sight, but so too is the danger of complacency.

Capital Calls: UnitedHealth, ETFs, Animal drugs

14 Apr 2023

Concise views global finance: Health insurer UnitedHealth continues to flex its muscles; Canada traps investors inside exchange-traded funds; private equity firm EQT buys into medicine for pets.

Commercial property pain is only just beginning

13 Apr 2023

Valuations of offices and shopping malls are under threat as rising interest rates ratchet up the cost of buying real estate. In this Viewsroom podcast, Breakingviews columnists discuss how inflation and remote working could make the crisis far worse than 2008.

A top tip for central banks: talk less, smile more

11 Apr 2023

Investors’ obsession with policymakers’ hints about future interest rate movements is fueling market volatility. As bank failures and inflation upend forecasts, officials can take a more muted approach. It will help them steer the economy without disturbing financial stability.

Capital Calls: Reserve Bank of India

6 Apr 2023

Concise views on global finance: The central bank surprised by keeping its key borrowing cost at 6.5%, citing concern about global financial stability.

Sterling’s safe haven status will prove fleeting

6 Apr 2023

Investors have piled into the pound since the start of troubles at US banks, pushing it 5% higher against the dollar. Yet easing turmoil stateside will lead markets to fret more over UK issues: a probable recession, dire long-term growth, and a likely dovish central bank.

Aussie central bank fix will paper over inflation

4 Apr 2023

Canberra is driving overdue governance upgrades at the regulator. They will make the Reserve Bank of Australia smoother to run but won’t help beleaguered boss Philip Lowe much. Peers hoping the review yields new strategies for cooling supply-side price hikes will be disappointed.

ECB’s inflation battle has a 550 bln euro problem

31 Mar 2023

Christine Lagarde must keep tightening policy without triggering a bank crisis. She faces a test in June when a chunk of emergency loans comes due, increasing lenders’ funding costs. Targeted help, however, could ease financial risks and preserve the fight against high prices.

Capital Calls: Bank of England, Wonder drugs

23 Mar 2023

Concise views on global finance: The UK central bank has joined peers in raising rates, but there’s not much room to keep hiking. Meanwhile, a drug that might help smokers’ lung is could be good for makers Regeneron and Sanofi, but even better for society.

Market nerves tie US rate-setters’ hands

22 Mar 2023

The Federal Reserve's quarter-point rate hike was the best it could do without creating other issues. Higher rates put more stress on banks, but investors expected such a move. Chair Jay Powell might not like following behind markets, but nor can he afford to surprise them.

Fed’s self-scrutiny starts off on the wrong foot

22 Mar 2023

Supervisory tsar Michael Barr is leading a probe into Silicon Valley Bank’s collapse. But the Federal Reserve’s tangled, partly centralized structure makes it ill-suited to conduct a warts-and-all review of its supervision. Banks don’t police themselves; the Fed shouldn’t either.

Bank woes expose gaps in EU safety net

22 Mar 2023

As the US and Switzerland scramble to head off contagion, the European Union is watching from a shaky perch. While the euro zone probably could fend off a new banking crisis, it lacks some tools for doing so. Even a backstop for insuring retail deposits remains out of reach.

BoE’s inflation pickle can taste sweet in Britain

22 Mar 2023

A surprise jump in consumer prices will force the Bank of England to hike interest rates by 25 basis points, rather than pausing. Governor Andrew Bailey can now focus on helping a shaky UK economy by freezing borrowing costs for the rest of 2023 and start cutting them next year.

Fed can follow ECB, BoE on monetary tightrope

21 Mar 2023

Bank failures and high inflation complicate the US Federal Reserve’s interest rate decision on March 22. Its Western peers have shown how to fight rising prices while aiding financial stability. Taking the road more traveled would also ease traders' fears of new crises.

UBS salvages most value from Credit Suisse wreck

19 Mar 2023

The Swiss bank is scooping up its ailing arch-rival for just $3.2 bln in a state-arranged rescue. In return for shoring up confidence it gets a balance sheet backstop, a competition waiver, big savings and a giant capital boost. It also becomes bigger and more systemic than ever.

Where is Silicon Valley’s J. Pierpont Morgan?

17 Mar 2023

JPMorgan chief Jamie Dimon channeled his predecessor by corralling fellow bank CEOs to support First Republic. Financiers band together, even with regulators, when the going gets tough. Silicon Valley, more fragmented and libertarian, lacks such a savior. That could change.

Capital Calls: FedEx delivers, for now

17 Mar 2023

Concise views on global finance: Shares in the delivery company shot up over 10% on Friday, as cost-cutting measures pay off. Those benefits could easily dwindle.

Credit Suisse puts new dent in Swiss bank armour

17 Mar 2023

The Alpine country’s solidity is its main selling point for wealthy clients. Yet for the second time in 15 years, authorities have rushed to halt a spiralling crisis of trust at a big Zurich lender. Shoring up the Swiss financial system will only partly repair the damage.