Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Central Banks’

A threat to the independence of Italy’s central bank

Posted by hkarner - 16. Februar 2019

Date: 14-02-2019
Source: The Economist

The country’s populist leaders alarm European bankers

The bank of italy has long been seen as one of a handful of efficient and incorruptible institutions that curb Italy’s anarchic tendencies. But on February 9th this august establishment came under fire from the two deputy prime ministers who call the shots in the populist government that is nominally led by Giuseppe Conte, the prime minister. Matteo Salvini, who leads the hard-right Northern League, said he wanted to “reboot” the senior management at both the central bank and the stockmarket regulator, Consob. Luigi Di Maio of the Five Star Movement (m5s) demanded “discontinuity”. Both alleged the Bank had failed to protect investors and deposit-holders. Two days earlier, the cabinet had refused to approve a further six-year term for Luigi Federico Signorini, the deputy director-general primarily responsible for banking supervision.

The attack sent ripples of apprehension through the euro zone amid media stories that the populist coalition wanted to get its hands on the Bank’s gold reserves, the third-largest of any country, to fund its expansionary fiscal policies. The president of the Eurogroup of finance ministers, Mario Centeno, and the eu commissioner for economic affairs, Pierre Moscovici, both pointedly stressed the need to preserve the independence of central banks in the single currency area.

On an optimistic interpretation, the threats were perhaps not meant to be taken too seriously. The coalition leaders’ remarks were addressed to a very specific audience: an assembly of stakeholders who lost money when two banks in the Veneto region were liquidated in 2017. The government has promised partially to reimburse them. But eu rules on state aid could yet prevent that. Inveighing against the central bank enabled the party leaders to win plaudits from an unhappy audience. Den Rest des Beitrags lesen »


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Central Bankers’ Fiscal Constraints

Posted by hkarner - 7. Januar 2019

Kenneth Rogoff, Professor of Economics and Public Policy at Harvard University and recipient of the 2011 Deutsche Bank Prize in Financial Economics, was the chief economist of the International Monetary Fund from 2001 to 2003. The co-author of This Time is Different: Eight Centuries of Financial Folly, his new book, The Curse of Cash, was released in August 2016.

With policy interest rates near zero in most advanced economies (and just above 2% even in the fast-growing US), there is little room for monetary policy to maneuver in a recession without considerable creativity. But those who think fiscal policy alone will save the day are stupefyingly naive.

CAMBRIDGE – If you ask most central bankers around the world what their plan is for dealing with the next normal-size recession, you would be surprised how many (at least in advanced economies) say “fiscal policy.” Given the high odds of a recession over the next two years around 40% in the United States, for example – monetary policymakers who think fiscal policy alone will save the day are setting themselves up for a rude awakening.

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Financial supervisory architecture since the Global Crisis: Supervisory models remain diverse, but more powers for central banks

Posted by hkarner - 7. Dezember 2018

Daniel Calvo, Juan Carlos Crisanto, Stefan Hohl 23 November 2018, vox.eu

Daniel Calvo, Senior Economist, Central Bank of Chile
Juan Carlos Crisanto, Deputy Chair of the Financial Stability Institute, Bank for International Settlements
Stefan Hohl, Senior Advisor, Financial Stability Institute, Bank for International Settlements

Following the Global Crisis, a number of significant regulatory reforms have helped to improve both crisis prevention and crisis management systems. Yet an effective financial supervisory architecture is essential to optimise the positive effect of the post-crisis reforms. When referring to a financial supervisory architecture, we mean an institutional supervisory setup that: (i) assigns specific functions to individual financial authorities; (ii) establishes coordination and cooperation mechanisms among those authorities; and (iii) specifies other approaches and arrangements to avoid potential conflicts of mandates. Deciding on the above institutional issues generally entails trade-offs between synergies across functions and potentially conflicting goals. In addition, the choices are influenced by the structure of the financial sector, past experience with financial crises, and legal, historical, cultural and political economy considerations. Moreover, the effectiveness of a financial supervisory architecture is very much related to the financial authorities’ ability to act with clear objectives, operational autonomy, comprehensive and effective powers, sufficient resources and adequate incentives.  Den Rest des Beitrags lesen »

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Why Central Bank Digital Currencies Will Destroy Cryptocurrencies

Posted by hkarner - 21. November 2018


Nouriel Roubini, a professor at NYU’s Stern School of Business and CEO of Roubini Macro Associates, was Senior Economist for International Affairs in the White House’s Council of Economic Advisers during the Clinton Administration. He has worked for the International Monetary Fund, the US Federal Reserve, and the World Bank.

Leading economic policymakers are now considering whether central banks should issue their own digital currencies, to be made available to everyone, rather than just to licensed commercial banks. The idea deserves serious consideration, as it would replace an inherently crisis-prone banking system and close the door on crypto-scammers.

NEW YORK – The world’s central bankers have begun to discuss the idea of central bank digital currencies (CBDCs), and now even the International Monetary Fund and its managing director, Christine Lagarde, are talking openly about the pros and cons of the idea.

This conversation is past due. Cash is being used less and less, and has nearly disappeared in countries such as Sweden and China. At the same time, digital payment systems – PayPal, Venmo, and others in the West; Alipay and WeChat in China; M-Pesa in Kenya; Paytm in India – offer attractive alternatives to services once provided by traditional commercial banks. Den Rest des Beitrags lesen »

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IMF Chief Calls for Exploration of Digital Currencies

Posted by stgara - 20. November 2018

Nov 14, 2018 at 09:00 UTC, Coin Desk

Christine Lagarde, managing director and chairwoman of the International Monetary Fund (IMF), has encouraged the “exploration” of central bank digital currencies (CBDCs) in the light of decreasing demand for cash and rising preference for digital money.

In a prepared speech for the Singapore Fintech Festival on Wednesday, Lagarde said:

“I believe we should consider the possibility to issue digital currency. There may be a role for the state to supply money to the digital economy.”

Various central banks around the world are “seriously” considering the issuance of digital currency, including Canada, China, Sweden and Uruguay, she said. “They are embracing change and new thinking – as indeed is the IMF.”

Lagarde noted that major cryptocurrencies like bitcoin, ethereum and XRP, are also “vying for a spot in the cashless world, constantly reinventing themselves in the hope of offering more stable value, and quicker, cheaper settlement.” Den Rest des Beitrags lesen »

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A debate about central-bank independence is overdue

Posted by hkarner - 20. Oktober 2018

Date: 18-10-2018
Source: The Economist

In a low-inflation world, links between governments and monetary policymakers need rethinking

The federal reserve has heard worse. But when the president complains that it has gone “crazy” by tightening monetary policy, as Donald Trump did on October 10th, Americans fret that another norm is about to be overturned. An independent central bank is considered a pillar of a modern economy; presidents are supposed to mutter any criticisms they might have in private. But is that really for the best? Although Mr Trump’s complaints were not intended to start a high-minded debate, one is overdue.

Operational independence for central banks is relatively new. The principle grew out of work in the late 1970s and early 1980s by prominent economists working in the “rational expectations” school of economic thought, among them Finn Kydland and Edward Prescott, who were eventually awarded the Nobel prize. They considered the implications of people’s ability to look into the future and to anticipate the behaviour of self-interested politicians. Den Rest des Beitrags lesen »

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The next recession

Posted by hkarner - 13. Oktober 2018

Date: 11-10-2018
Source: The Economist

Toxic politics and constrained central banks could make the next downturn hard to escape

JUST a year ago the world was enjoying a synchronised economic acceleration. In 2017 growth rose in every big advanced economy except Britain, and in most emerging ones. Global trade was surging and America booming; China’s slide into deflation had been quelled; even the euro zone was thriving. In 2018 the story is very different. This week stockmarkets tumbled across the globe as investors worried, for the second time this year, about slowing growth and the effects of tighter American monetary policy. Those fears are well-founded.

The world economy’s problem in 2018 has been uneven momentum. In America President Donald Trump’s tax cuts have helped lift annualised quarterly growth above 4%. Unemployment is at its lowest since 1969. Yet the IMF thinks growth will slow this year in every other big advanced economy. And emerging markets are in trouble.

This divergence between America and the rest means divergent monetary policies, too. The Federal Reserve has raised interest rates eight times since December 2015. The European Central Bank (ECB) is still a long way from its first increase. In Japan rates are negative. China, the principal target of Mr Trump’s trade war, relaxed monetary policy this week in response to a weakening economy. When interest rates rise in America but nowhere else, the dollar strengthens. That makes it harder for emerging markets to repay their dollar debts. A rising greenback has already helped propel Argentina and Turkey into trouble; this week Pakistan asked the IMF for a bail-out. Den Rest des Beitrags lesen »

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Europe Set for Trio of Central Bank Decisions

Posted by hkarner - 14. September 2018

Date: 13-09-2018
Source: The Wall Street Journal

A primer on what to expect ahead of the ECB, Bank of England and Turkey’s central bank announcements

ECB President Mario Draghi

A trio of central banks, in the U.K., eurozone and Turkey, are set to announce policy decisions within an hour of each other on Thursday, between 7 a.m. and 8 a.m. Eastern. They are likely to underscore weaknesses and vulnerabilities that have weighed on the world economy and financial markets this year.

Europe’s two most prominent central banks—the European Central Bank and Bank of England—are expected to signal caution, reinforcing a policy lag behind the Federal Reserve. Turkey’s central bank, by contrast, could act vigorously to tame soaring inflation.

ECB officials will likely have an eye on risks emanating from both Turkey, where a number of eurozone banks do business, and the U.K., which is entering a sensitive period in its negotiations to leave the European Union. Den Rest des Beitrags lesen »

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Central bankers grapple with the changing nature of competition

Posted by hkarner - 2. September 2018

Date: 01-09-2018
Source: The Economist: Free exchange

This year’s Jackson Hole meeting was a chance to study market concentration

RECENT visitors to Jackson Hole, a resort in the Teton Mountain range in Wyoming, were denied the usual scenic views by a shroud of smoke from recent forest fires. Disappointing, no doubt, for the tourists among them—but oddly fitting for the economic panjandrums attending the Federal Reserve Bank of Kansas City’s annual symposium on August 23rd-25th. Not only are economic policymakers used to making choices in a fog of uncertainty, but this year’s theme of market structures generated its own haze. Though the nature of competition in America’s economy is changing, it is unclear how worried they should be.

Jerome Powell, the chairman of the Federal Reserve, highlighted slow wage growth in recent decades. America seems stuck in a “low-productivity mode”, he said. Others pointed to sluggish investment, despite cheap capital, and a fall in workers’ share of national income. Could these ills share some common causes, namely rising market concentration and crimped competition? Den Rest des Beitrags lesen »

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Die Sehnsucht der Autokraten nach der Kontrolle über das Geld

Posted by hkarner - 22. August 2018

Mit dem „Wunsch“, die Federal Reserve möge ihm politisch „etwas helfen“, begibt sich der amerikanische Präsident auf sehr dünnes ökonomisches Eis.

Wenn Autokraten politisch träumen, dann spielt dabei nicht selten die Kontrolle über die nationale Notenbank eine tragende Rolle. Ist ja praktisch, wenn man seine Pläne mit Geld aus der Notenpresse umsetzen kann.

Einer der zentralen Punkte der bolivarischen Revolution des Hugo Chávez in Venezuela war demnach folgerichtig die 2007 erfolgte Unterstellung der Notenbank (samt der Devisenreserven des Landes) unter die persönliche Kontrolle des Präsidenten.

Wie so etwas auszugehen pflegt, können wir gerade live mitverfolgen: Der Internationale Währungsfonds erwartet für heuer eine Million Prozent Inflation. Schwer vorstellbar, nicht wahr? Was das konkret bedeutet, fragt man am besten jene Venezolanerin, die einem Reporter von „El Mundo“ gestern vorgerechnet hat, dass sie für ihren offiziellen Monatslohn nach der jüngsten Währungsreform gerade noch zweieinhalb Flaschen Orangensaft bekäme – falls es die im Geschäft überhaupt gäbe.

Auf flottem Weg in Richtung dieses Horrorszenarios befindet sich auch der türkische Sultandarsteller Recep Tayyip Erdoğan, der es geschafft hat, die Landeswährung mit der mehrmals ausgesprochenen Drohung, er werde eine (nach Meinung so gut wie aller Ökonomen dringend nötigen) Zinserhöhung durch die Notenbank nicht zulassen, jedesmal ein Stück weiter in den Keller zu drücken und das Land in Richtung Staatspleite zu lenken.

Und jetzt Donald Trump: Ihm gefallen die Zinserhöhungen der Fed ganz und gar nicht, und er „wünscht“ sich, dass ihm die Notenbank bei seiner America-First-Strategie mit Niedrigzinsen „etwas helfen“ würde, ließ er gestern verlauten.

Da brennt jetzt aber der Hut! Die Inlandskonjunktur mit Steuersenkungen anzufeuern, gleichzeitig die Inflation durch Importzölle auf Trab zu bringen – und dann der Notenbank lenkende Maßnahmen zu untersagen, das klingt nach einem teuflischen Mix.

Zum Glück sind die USA – trotz der autokratischen Züge ihres Präsidenten – noch lang keine Autokratie, sondern eine immer noch gefestigte Demokratie. Der Präsident wird mit diesen Aussagen also außer einer kurzfristigen Manipulation des Dollarkurses nicht allzu viel erreichen.

Aber gefährlich sind solche Vorstöße allemal. Denn die Notenbanken sind formell zwar unabhängig, schweben aber nicht im politischen Vakuum. Die Bestellung des Chefs der EZB ist de facto Angelegenheit der Eurozonen-Regierungen, der Gouverneur der Oesterreichischen Nationalbank wird formell vom Ministerrat berufen. Selbst der Chef der privaten amerikanischen Federal Reserve wird vom US-Präsidenten nominiert.

Eine bestimmte Form der Abhängigkeit ist also immer da. Zumal mit der Auswahl des Kandidaten schon konkrete politische Vorstellungen verbunden sind. Trump selbst hat ja durchklingen lassen, dass er von Fed-Chef Jerome Powell ein wenig enttäuscht ist, weil er sich von ihm anderes erwartet habe, nämlich billiges Geld.

Das ist noch keine große Sache. Selbstverständlich darf die Politik die Notenbank kritisieren. Wie etwa Trump das mit der Bemerkung, er sei von Zinserhöhungen „nicht begeistert“, gemacht hat. Haarig wird es, wenn die Politik beginnt, ins Tagesgeschäft der Notenbank einzugreifen. Das ist der erste Schritt in Richtung Abgrund. Trumps „Wunsch“, die Fed möge ihm bei seiner Politik „etwas helfen“, ist da schon sehr nahe dran.

Wahrscheinlich wissen das der Präsident und sein Beraterstab aber ohnehin, und es ist nur darum gegangen, den Kurs der Landeswährung ein bisschen in die gewünschte Richtung zu manipulieren. (Etwas, was Trump übrigens der EZB und den Chinesen ständig vorwirft.) Und ziemlich sicher ist die Fed stark genug, unsinnigen Präsidentenwünschen zu widerstehen. Sie hat schon anderes ausgehalten.

Aber hellhörig sollte man schon werden, wenn der Chef der mächtigsten Industrienation beginnt, in so abenteuerliche Gefilde abzudriften. Denn im Gegensatz zum venezolanischen Bolivar, der uns herzlich egal sein kann, steht hier die Weltleitwährung auf dem Spiel.

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