Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Central Banks’

Cryptocurrencies and monetary policy

Posted by stgara - 6. August 2018

Date: June 28, 2018

Executive summary

This Policy Contribution tries to answer two main questions: can cryptocurrencies acquire the role of money? And what are the implications for central banks and monetary policy?

Money is a social institution that serves as a unit of account, a medium of exchange and a store of value. With the emergence of decentralised ledger technology (DLT), cryptocurrencies represent a new form of money: privately issued, digital and enabling peer-to-peer transactions.

Historically, currencies fulfil their main functions successfully when their value is stable and their user network sufficiently large. So far, cryptocurrencies are arguably falling short against these criteria. They resemble speculative assets rather than money. Primarily this is because of their inherent volatility, which is the by-product of their inelastic supply, and which limits their widespread use as a medium of exchange.

Cryptocurrency protocols could theoretically evolve to limit their volatility and correct their current deficiencies. If successful, this could lead to an increase in their popularity as an alternative to official currencies. A successful alternative to official currencies could put pressure on those who manage official currencies to provide better policies. Den Rest des Beitrags lesen »

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Why Reinvent the Monetary Wheel?

Posted by hkarner - 24. Mai 2018

Robert Skidelsky, Professor Emeritus of Political Economy at Warwick University and a fellow of the British Academy in history and economics, is a member of the British House of Lords. The author of a three-volume biography of John Maynard Keynes, he began his political career in the Labour party, became the Conservative Party’s spokesman for Treasury affairs in the House of Lords, and was eventually forced out of the Conservative Party for his opposition to NATO’s intervention in Kosovo in 1999.

Cryptocurrencies promise to realize Friedrich Hayek’s dream of a free market in money. But human societies have discovered no better way to keep the value of money roughly constant than by relying on central banks to exercise control over its issue.

LONDON – Slumps have always been boom times for monetary experiments, and the economic collapse of 2008-2009 was no different. Underlying this recurrence is the instinctive feeling that economic calamities must have monetary causes, and therefore monetary remedies. There is either too much money, which causes inflation, or too little, which leads to depression. So the aim of monetary reformers –among whom are always a large number of quacks and cranks – has been to “keep money in order” and prevent its gyrations from disturbing the “real” economy of production and trade.

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Steuerung der Risiken eines erstarkenden Dollars

Posted by hkarner - 16. Mai 2018

Mohamed A. El-Erian, Chief Economic Adviser at Allianz, the corporate parent of PIMCO where he served as CEO and co-Chief Investment Officer, was Chairman of US President Barack Obama’s Global Development Council. He previously served as CEO of the Harvard Management Company and Deputy Director at the International Monetary Fund. He was named one of Foreign Policy’s Top 100 Global Thinkers in 2009, 2010, 2011, and 2012. He is the author, most recently, of The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse.

NEWPORT BEACH – Die Regierung des argentinischen Präsidenten Mauricio Macri hat den Internationalen Währungsfonds um einen Kredit gebeten, um – so ihre Hoffnung – dem Verfall des Pesos Einhalt zu gebieten, der die Zinsen in die Höhe getrieben hat, die Konjunktur bremsen wird und das Reformprogramm bedroht. Diese Trendwende für die Volkswirtschaft spiegelt teilweise, aber keinesfalls völlig, den von der jüngsten Aufwertung des US-Dollar ausgehenden umfassenderen Druck wider – ein Prozess, der sich beschleunigen wird, weil sowohl die Geldpolitik als auch die Unterschiede bei der Wachstumsentwicklung inzwischen die USA begünstigen.

Die US Federal Reserve normalisiert ihre Geldpolitik schon seit einer Weile, und damit deutlich früher als andere systemisch wichtige Notenbanken: Sie erhöht die Zinsen, stellt ihre Wertpapierkäufe ein und hat den mehrjährigen Prozess einer Schrumpfung ihrer Bilanz eingeleitet. Dies wurde in diesem Jahr durch einen anderen Katalysator der jüngsten Dollaraufwertung verstärkt: eine wachsende und weniger günstige Divergenz zwischen den Wirtschaftsdaten und -erwartungen in der übrigen Welt.

In 2017 mühten sich die Märkte größtenteils, zu den Wachstumsindikationen außerhalb der USA aufzuschließen, die deutlich günstiger waren als erwartet. Infolgedessen wertete die meistbeachtete Messgröße eines handelsgewichteten Dollarindex im letzten Jahr um 10% ab. Die Kapitalflüsse nach Europa und in wichtige Schwellenvolkswirtschaften nahmen zu, da die Anleger von dem Wachstum zu profitieren suchten und zugleich in den Genuss höherer Renditen und der Möglichkeit von Kapitalerträgen aus Währungsschritten kommen wollten. Den Rest des Beitrags lesen »

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John Weeks – Politics of Monetary Policy and Why Progressives Prefer to Tax & Spend

Posted by hkarner - 12. Mai 2018

Thanks to M.R.

One of the most important victories of neo-liberalism was banning serious fiscal policy by democratically elected governments to deal with economic crises, relegating this power to monetary policy of purportedly independent, yet unelected, central banks. The result has been increasing inequality. As john Weeks points out, change means reinstating fiscal policy as a tool of government and democracy.

John Weeks is Professor Emeritus at SOAS, University of London, and associate of Prime Economics

 The recent article Richard Murphy raised fundamental issues that should guide all progressive policy making.  Perhaps the most fundamental of these is the role of fiscal and monetary policies.  He makes the fundamental point that democratically accountable governments implement fiscal policy, while almost without exception the agents of monetary policy, central banks, are either unaccountable in law or in practice.

Neoliberalism is the route by which we reached this inversion of policy making, the ascendency of the unaccountable over representative and democratic.  Since the late 1970s the ideologues of economic policy have relentlessly propagandised against fiscal policy and in favour of monetary policy, with astounding success.  Even some putatively progressive organisations endorse the neoliberal ideology that central banks, not elected governments, should serve as the initiators of economic policy.  The so-called QE for the People is an example of the allegedly progressive version of central bank supremacy, a petition for which I endorsed in a moment of insufficient analysis. Den Rest des Beitrags lesen »

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Europe’s Mixed Economic Fortunes Complicate Path for Stimulus

Posted by hkarner - 29. April 2018

Date: 28-04-2018
Source: The Wall Street Journal

Sharp slowdowns in growth in France and the U.K. pose challenge to policy makers at ECB and BOE

PARIS—Europe’s economies displayed mixed fortunes in the first three months of the year, injecting a fresh source of uncertainty as central banks consider further steps to withdraw crisis-era stimulus.

Figures released Friday on gross domestic product—the broadest measure of the goods and services produced in an economy—recorded sharp slowdowns in France and the U.K. But Spain produced steadily strong growth, while Austria and Belgium slowed only slightly.

At the same time, a European Commission survey showed business confidence stabilized in April, suggesting the slowdown in the early part of the year was caused by temporary factors such as poor weather and strikes. Indeed, economic forecasters surveyed by the European Central Bank have raised their growth forecasts for the year as a whole.

The mixed bag complicates deliberations at the ECB and the Bank of England, where policy makers are seeking clearer signals as to the underlying trend before deciding to proceed with reducing stimulus. Den Rest des Beitrags lesen »

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The Central-Bank Song Remains the Same

Posted by hkarner - 11. April 2018

Paola Subacchi

Paola Subacchi is a senior fellow at Chatham House and visiting professor at the University of Bologna. She is the author, most recently, of The People’s Money: How China Is Building a Global Currency .

Even as the world’s major central banks face important transitions, the choices of their new leaders have reflected a desire for continuity. In terms of both policy and personnel, the new normal looks set to be mostly old wine in familiar bottles.

LONDON – The changing of the guard that is taking place at the systemically important central banks in 2018-2019 will mark the beginning of a new era of monetary policy. Who is likely to lead this transition to a “new normal”? More important, just how new will it really be?

In the decade since the global financial crisis, advanced-country central banks have adopted unprecedentedly active monetary policies. The Bank of Japan’s Haruhiko Kuroda and the European Central Bank’s Mario Draghi maintain such policies to this day, in order to stimulate economic activity and counter deflationary pressures. By contrast, the US Federal Reserve, beginning under former Chair Janet Yellen, and the Bank of England, under Mark Carney, have been laying the groundwork for policy “normalization.” Den Rest des Beitrags lesen »

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Chinas neuer Zentralbankchef präsentiert sich als Verfechter des Freihandels

Posted by hkarner - 26. März 2018

Chinas neuer Zentralbankchef Yi Gang hat eine weitere Öffnung des Finanzsektors in Aussicht gestellt. Dieser Prozess müsse aber mit einer Fortentwicklung der Regulierung einhergehen, um Risiken vorzubeugen, sagte Yi.

Chinas neuer Zentralbankchef Yi Gang hat eine weitere Öffnung des Finanzsektors in Aussicht gestellt. Dieser Prozess müsse aber mit einer Fortentwicklung der Regulierung einhergehen, um Risiken vorzubeugen, sagte Yi am Sonntag in seiner ersten öffentlichen Rede im neuen Amt. Beide Ziele würden mit gleichem Nachdruck verfolgt.

„Die Geschichte hat gezeigt, dass Bereiche, die offener sind, auch wettbewerbsfähiger sind und Bereiche, die weniger offen sind, weniger wettbewerbsfähig sind und zunehmende Risiken bergen“, sagte Yi. Zu den angestrebten Reformen zählte er auch Änderungen in der Wechselkursermittlung.  Den Rest des Beitrags lesen »

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Can’t hardly wait

Posted by hkarner - 24. März 2018

Date: 22-03-2018
Source: The Economist: Free exchange

A misguided notion of what is normal could cause central banks to err

LIKE teenagers, central bankers long to feel normal. For many of them (the central bankers, that is), the past decade has been an unusually angst-ridden one. They stumbled through it, confused by the way their policymaking bodies were changing, unsure what to do with their interest rates, embarrassed by their burgeoning balance-sheets. Teenagers often seek to quell their anxiety and insecurity by imitating behaviour they regard as normal. So too for central bankers.

But the desire to normalise policy, and leave crisis-era measures behind, could distract central bankers from their main goals, namely to support growth and control inflation. The Bank for International Settlements, a global club for central bankers, recently urged officials not to let market jitters discourage them from raising interest rates. Yet at worst, chasing some elusive notion of normal could put the global recovery at risk. Den Rest des Beitrags lesen »

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The Fed Should Be Careful What It Wishes For

Posted by hkarner - 1. März 2018

Carmen M. Reinhart is Professor of the International Financial System at Harvard University’s Kennedy School of Government.

Vincent Reinhart is Chief Economist and Investment Strategist at BNY Mellon Asset Management North America Corporation.

Major central banks’ fixation on inflation betrays a guilty conscience for serially falling short of their targets. It also raises the risk that in fighting the last war, they will be poorly prepared for the next – the battle against too-high inflation.

CAMBRIDGE – Empirical relationships in economics are sufficiently fragile that there is even a “law” about their failure. As British economist Charles Goodhart explained in the 1980s, “any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.” Central banks in advanced economies have recently been providing a few more case studies confirming Goodhart’s Law, as they struggle to fulfill their promises to raise inflation to the stable plateau of their numerical targets. Den Rest des Beitrags lesen »

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Geldwaschmaschine Lettland: Was hinter den Affären steckt

Posted by hkarner - 19. Februar 2018

Ein Notenbankgouverneur unter Korruptionsverdacht, ein Geldhaus wegen Sanktionsbruch unter Quarantäne: Was ist da los in Riga?

Wien/Riga. Das hat es noch nie gegeben: Ein amtierender Gouverneur einer Notenbank der Eurozone wird festgenommen, weil man ihn der Korruption verdächtigt. So geschehen am Wochenende in Lettland. Am Montag meldeten die Ermittler: Ilmārs Rimšēvičs soll mindestens 100.000 Euro an Schmiergeld gefordert haben. Nach Zahlung einer Kaution in gleicher Höhe setzte man den dienstältesten Notenbankchef des Währungsraums vorerst wieder auf freien Fuß. Er beteuert seine Unschuld – und will nicht weichen. Dabei hatten der Premier und mehrere Minister den 52-Jährigen zum Rücktritt gedrängt, um den Imageschaden für den baltischen Kleinstaat zu begrenzen. Aber so ist das eben mit der Unabhängigkeit der Geldpolitik: Ihre Protagonisten wird man nicht so leicht los. Den Rest des Beitrags lesen »

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