Central Banks

China’s central bank tries brighter shade of green

16 Nov 2021

A new lending programme could, by one estimate, lead to nearly $1 trln of investment in clean energy projects. It’s a bolder policy than from Western peers, and also a clever way to tackle the stagflation dilemma. Runaway stimulus remains a risk, as does misallocated capital.

African telcos finally get their big fintech prize

8 Nov 2021

After years of delay, Nigeria’s central bank is letting phone firms offer basic banking via handsets. For the regulator, it’s a way of staying relevant as consumers dabble in cryptocurrencies. For operators like MTN and Airtel Africa, it’s a multibillion-dollar payday.

Central Europe is monetary policy’s control test

8 Nov 2021

The Czech, Polish and Hungarian central banks are hiking interest rates, the traditional riposte to rising inflation. In contrast, peers in major economies are responding less aggressively to price pressures. That makes for an interesting experiment.

UK wades into central banks vs. markets fray

4 Nov 2021

Bank of England boss Andrew Bailey has a different mandate from Fed Chair Jay Powell. But his basic challenge is the same: persuading investors that interest rates won’t rise as much as they think next year. The Briton’s old-school inflation target makes his job harder.

Banks’ green push requires more stick than carrot

4 Nov 2021

Global standard-setters are mulling how to tackle climate risk. One popular idea, fiddling with regulatory risk weights to encourage greener lending, may backfire. Better to hammer slow-moving banks with extra capital requirements while pressing on with real climate stress tests.

E-brokers are big reach for Beijing’s long arm

4 Nov 2021

A Chinese central banker chided trading apps that cater to rich investors with money abroad. That suggests new restrictions are in the works. Barring an awkward crackdown on banks that help move capital overseas or a complete ban, however, $9 bln Futu and its peers can thrive.

Central bankers’ word is no longer their bond

1 Nov 2021

The Reserve Bank of Australia has for several days stopped defending a debt yield target. Such unreliability makes asset prices jumpier. Breaking faith is especially unadvisable when high inflation means rate-setters need markets and the public to trust them more than ever.

ECB needs a louder megaphone to reach bond markets

28 Oct 2021

President Christine Lagarde said she won’t hike rates as soon as investors anticipate. But that didn’t change their expectations and euro zone debt yields rose. She will have to do a better job of convincing them if she is to avert an unwanted tightening in financing conditions.

Capital Calls: Australian coal, Liquor groups

22 Oct 2021

Concise views on global finance: An Australian goods transporter’s effort to reduce its coal exposure is very underwhelming; Rémy Cointreau and Pernod Ricard leave less inflation-cushioned groups like Unilever crying into their drams.

Chancellor: Time to inflation-proof portfolios

21 Oct 2021

As consumer prices and interest rates rise, financial markets will become more volatile. Investors can protect themselves by reducing duration, their exposure to rates, and even by holding cash. That may sound boring, but it provides a means to buy assets when they become cheap.

Jens Weidmann’s best replacement is another hawk

20 Oct 2021

The Bundesbank president has unexpectedly resigned. Weidmann criticised Mario Draghi’s bond-buying plan, and a more dovish rate-setter could help the ECB keep policy loose in tricky times. But having an articulate and critical representative also helped keep German voters happy.

Capital Calls: Facebook, TeamViewer, Audio M&A

6 Oct 2021

Concise views on global finance: Whistleblower Frances Haugen’s polished rollout is a warning for Big Tech; the video software specialist’s 25% share price fall shows the perils of growth stocks; hearing aid group GN snaps up headset maker SteelSeries for $1.3 bln.

ECB has the least worrying inflation problem

1 Oct 2021

Euro zone consumer prices rose 3.4% in September, strengthening the hand of those who want boss Christine Lagarde to wind up emergency monetary stimulus. But structural unemployment is higher, the economy less robust and fiscal policy less stimulative than in the United States.

Easing crisis leaves Lagarde with tough transition

30 Sep 2021

The European Central Bank boss will have to fall back on a pre-pandemic bond-buying scheme once its emergency purchase programme runs out. The former is less flexible and may force Christine Lagarde to choose between flouting rules or curtailing support to the fragile economy.

Stagflation jitters are at least half wrong

29 Sep 2021

High inflation and stagnant activity would be a noxious mix for markets. Central bankers have the tools, and likely the will, to combat the former. But when price pressures are a symptom of supply shocks, as now, monetary policy is a crude weapon that will lead to weaker growth.

Capital Calls: U.S. debt, Hollywood, Blue Prism

28 Sep 2021

Concise views on global finance: Republicans have blocked additional federal borrowing, bringing a default closer; talent agencies CAA, ICM, and Endeavor take different strategic directions; private equity group Vista seems to be getting UK software group Blue Prism cheaply.

Turkey goes deeper into parallel monetary universe

23 Sep 2021

Ankara cut its main policy rate to 18% from 19%, kowtowing to President Erdogan just as other central banks take the opposite tack. A weaker lira and soaring energy bills add to the economy's inflation pains. With two years to another election, there’s little respite in sight.

Transitory inflation is a fig leaf that’s slipping

23 Sep 2021

The Fed, ECB and Bank of England reckon strong price pressures are a temporary phenomenon. But new forecasts and comments suggest inflation overshoots may persist next year, and last even longer in America. That’s hardly short-lived. Pretending otherwise will lead to problems.

Emerging economies face stages of inflation grief

16 Sep 2021

Central banks’ reactions to rising prices come in three steps, BNP Paribas reckons: denial, acceptance, and action. Brazil and Chile are further along, having hiked rates quickly as pressures mounted. Investors will prefer them to countries stuck in the first stage, like Turkey.

Capital Calls: Microsoft’s buyback, Railway M&A

15 Sep 2021

Concise views on global finance: the software giant’s $60 bln stock repurchase plan is smaller than it sounds; meanwhile, a tangled takeover battle for train operator Kansas City Southern takes a messy new track.