Central Banks

Review: The conundrum of no good jobs

5 Jul 2019

Low unemployment in the U.S. and UK hides a grimmer reality, economist David Blanchflower argues in his new book. Weak wage growth and widespread despair have prompted people to turn to populist leaders. He makes a compelling case for why policymakers can still rev up growth.

Bond markets keep raising bar for central bankers

4 Jul 2019

Global yields are falling with benchmark German ones at record lows. Investors expect more monetary policy easing on both sides of the Atlantic. That will come but the scale and speed of market moves mean rate-setters will have to work hard to meet ever-rising expectations.

Time to look beyond Europe for next IMF boss

3 Jul 2019

The international lender’s chief has always been European. Christine Lagarde’s exit will be a chance to drop the outdated convention. Any hope of salvaging the multilateral system means giving emerging and developing economies more clout. Competence matters more than nationality.

Viewsroom: What makes companies proud of Pride?

27 Jun 2019

Neither profit nor investor pressure explain U.S. firms lining up to mark 50 years of the LGBT-rights movement. They may simply be doing the right thing. But the nation still has a long way to go. Plus: how the UK prime minister race affects the Bank of England’s next boss.

New Zimbabwe dollar heading same way as old one

25 Jun 2019

Robert Mugabe’s successor has banned day-to-day use of foreign currency to promote a new local dollar. Crucially, there are no guarantees against the money-printing that killed its predecessor. Without adequate reserves, exports or popular support, the new unit is likely to fail.

Boris Johnson may spice up UK central bank race

24 Jun 2019

The frontrunner to succeed Prime Minister Theresa May tends to stray from the script. That increases the chances of an unconventional candidate replacing Mark Carney as the head of the Bank of England. If Johnson makes the pick, it could even be his most lasting legacy.

Big Tech warrants Bank of England’s open eyes

21 Jun 2019

The central bank may let technology firms deposit funds alongside regular lenders as Governor Mark Carney seeks to keep up with rapid shifts in finance. Lower costs and more competition are broadly positive. Large groups like Facebook, however, deserve a more cautious embrace.

Buybacks prolong Wall Street rally nobody loves

20 Jun 2019

U.S. stocks are near record highs – thanks in part to purchases by their issuers. Investors are pulling out of equities and fund managers report extreme bearishness amidst a weakening global economy. Hopes of Fed rate cuts are a fragile support when it’s the only game in town.

Fed gives data one more chance

19 Jun 2019

The U.S. central bank held rates steady, though no longer says it’s patient. Policy setters are up against weaker global growth, trade worries, more dovish signals from Europe and Japan, market hopes of rate cuts and Donald Trump’s brickbats. The tension may last only six weeks.

Mario Draghi will leave one big task undone

19 Jun 2019

The ECB’s annual Portugal shindig is this year as much a celebration of its outgoing boss as a deep dive into the euro’s first 20 years. The Italian bequeaths his as-yet-unnamed successor the unfinished job of boosting low inflation. That will be hard unless fiscal policy helps.

Central banks can only nudge towards greener world

18 Jun 2019

The Bank of France boss says climate change may end up being a stagflationary shock. That’s a good reason for rate-setters convening in Portugal to care about global warming. But meddling too much may imperil their independence. It’s up to governments to make a real difference.

Hurricane Trump may give Beijing some cover

14 Jun 2019

A torrent of rising U.S. tariffs threatens to wash out some of China’s growth. There’s far more behind the slowdown, but just as CEOs cite bad weather to obscure underlying issues, officials could use the trade war to release more stimulus or just blame Trump for missed targets.

Hadas: Fresh thinking can soften next downturn

12 Jun 2019

As the Federal Reserve and ECB get ready to loosen policy, their armouries look depleted. Modern monetary theory suggests the cost and quantity of money matter less than putting it in productive hands. How? With targeted financial regulation and fruitful government spending.

Irish central banker job glitch may be a blessing

11 Jun 2019

The government was thrilled to recruit a New Zealand Treasury official as its new governor. Now he faces an investigation about how he handled early accessing of budget information. If things go wrong, Ireland has a second chance to give Deputy Governor Sharon Donnery the job.

Mario Draghi puts easing back in play on way out

6 Jun 2019

The ECB boss is set to end his eight-year term without once raising interest rates. Some colleagues have even floated the possibility of further cuts or more asset buying. His successor will have to figure out how to boost inflation and growth without banks scaling back lending.

Indians kept waiting for benefits of low inflation

6 Jun 2019

Narendra Modi won at the ballot despite farmers hurting from sluggish price rises. To help goose a cooling economy, the RBI has cut rates a third time in four months, to 5.75%, in its first post-election meeting. It’ll only help if banks start passing lower costs onto borrowers.

Fed could do worse than mimic Donald Rumsfeld

5 Jun 2019

George W. Bush’s defense secretary famously talked of known knowns, known unknowns, and unknown unknowns. The U.S. central bank, seeking better communication, could borrow the categories. They help explain why markets now expect interest-rate cuts while Fed rate-setters don’t.

South Africa’s central bank debate goes off-piste

5 Jun 2019

A shrinking economy is prodding the ruling ANC to talk of “quantity easing” and changing the respected central bank’s remit. The constitution protects monetary policymakers’ independence and inflation mandate. But the growing confidence of would-be money printers is worrying.

Hadas: Shaky assumption underpins debt demand

5 Jun 2019

Investors are rushing into high-grade bonds even though long-term yields are falling. Real returns will be acceptable if disinflation persists. But that’s a big if. More active use of fiscal policy or worsening trade frictions could reverse a trend that’s lasted nearly 40 years.

Guest view: Innovation transforms central banking

3 Jun 2019

Technology is upending payments and regulation, writes the Bank for International Settlements’ Agustin Carstens. As policymakers rise to the challenge, and even study the possibility of issuing digital currencies themselves, monetary and financial stability is their pole star.