Posts Tagged ‘Interest’
Posted by hkarner - 24. April 2016
Source: The Wall Street Journal
Some call for Draghi’s resignation over bank’s unconventional attempts to spur growth, inflation
BERLIN—Accused of impoverishing millions and stoking populism in Germany, European Central Bank President Mario Draghi finally snapped this week. Politicians, he said, should mind their own business.
Such a war of words wasn’t supposed to happen in Germany, the country that did more than any other to establish central-bank independence as a condition for any successful monetary policy.
Far from sticking to their respective turfs, however, Mr. Draghi and German Finance Minister Wolfgang Schäuble have been sparring in public for days over the direction of monetary policy in the eurozone. Den Rest des Beitrags lesen »
Posted in Artikel | Verschlagwortet mit: ECB, Germany, Interest, WSJ | Leave a Comment »
Posted by hkarner - 14. April 2016
Joseph E. Stiglitz
Joseph E. Stiglitz, recipient of the Nobel Memorial Prize in Economic Sciences in 2001 and the John Bates Clark Medal in 1979, is University Professor at Columbia University, Co-Chair of the High-Level Expert Group on the Measurement of Economic Performance and Social Progress at the OECD, and Chief Economist of the Roosevelt Institute. A former senior vice president and chief economist of the World Bank and chair of the US president’s Council of Economic Advisers under Bill Clinton, in 2000 he founded the Initiative for Policy Dialogue, a think tank on international development based at Columbia University. His most recent book is Rewriting the Rules of the American Economy.
APR 13, 2016, Project Syndicate
NEW YORK – I wrote at the beginning of January that economic conditions this year were set to be as weak as in 2015, which was the worst year since the global financial crisis erupted in 2008. And, as has happened repeatedly over the last decade, a few months into the year, others’ more optimistic forecasts are being revised downward.
The underlying problem – which has plagued the global economy since the crisis, but has worsened slightly – is lack of global aggregate demand. Now, in response, the European Central Bank (ECB) has stepped up its stimulus, joining the Bank of Japan and a couple of other central banks in showing that the “zero lower bound” – the inability of interest rates to become negative – is a boundary only in the imagination of conventional economists. Den Rest des Beitrags lesen »
Posted in Artikel | Verschlagwortet mit: Banken, ECB, Euro, Finanzkrise, Growth, Interest, Project Syndicate, SME, Stiglitz | Leave a Comment »
Posted by hkarner - 12. April 2016
Posted on April 10, 2016 by iMFdirect
By Jose Viñals, Simon Gray, and Kelly Eckhold
Version in Deutsch (German), 日本語 (Japanese)
We support the introduction of negative policy rates by some central banks given the significant risks we see to the outlook for growth and inflation. Such bold policy action is unprecedented, and its effects over time will vary among countries. There have been negative real rates in a number of countries over time; it is negative nominal rates that are new. Our analysis takes a broad view of recent events to examine what is new, country experiences so far, the effectiveness of negative nominal rates as well as their limits and their unintended consequences. Although the experience with negative nominal interest rates is limited, we tentatively conclude that overall, they help deliver additional monetary stimulus and easier financial conditions, which support demand and price stability. Still, there are limits on how far and for how long negative policy rates can go.
Why are central banks using negative policy rates?
Once policy rates are cut to what used to be known as the ‘zero lower bound’, central banks can employ unconventional monetary policy measures to provide further stimulus if real interest rates are still above the levels consistent with price stability and full employment. Negative nominal policy interest rates are the latest addition to this unconventional toolkit. Six central banks so far have introduced negative rates that apply to some amount of the cash balances commercial banks hold with the central bank (Table 1). Negative rates aim to encourage the private sector to spend more and support price stability by further easing monetary and financial conditions. For smaller open economies, negative rates can also help discourage capital inflows and reduce exchange rate appreciation pressures. Den Rest des Beitrags lesen »
Posted in Artikel | Verschlagwortet mit: Central Banks, Eckhold, Gray, IMF, Interest, Vinals | Leave a Comment »
Posted by hkarner - 11. April 2016
Source: The Wall Street Journal
Finance Minister makes remarks amid growing criticism in Germany of European Central Bank
Wolfgang Schauble. The German Finance Minister Friday night called on governments to encourage their central banks to gradually move away from easy-money policies.
German Finance Minister Wolfgang Schäuble called on governments in Europe and the U.S. to encourage their central banks to gradually exit easy-money policies, in the strongest sign yet of Berlin’s growing impatience with the ultralow interest rates of the European Central Bank.
“There is a growing understanding that excessive liquidity has become more a cause than a solution to the problem,” Mr. Schäuble said, comparing the move away from easy-money policies to ending a drug addiction.
The unusually blunt comments from Chancellor Angela Merkel’s closest political ally come as the ECB has repeatedly ramped up its stimulus in recent months, seeking to support economic growth in the face of rising global headwinds and financial-market volatility. Den Rest des Beitrags lesen »
Posted in Artikel | Verschlagwortet mit: AfD, ECB, Germany, Helicopter Money, Interest, Schäuble, WSJ | Leave a Comment »
Posted by hkarner - 6. April 2016
Source: The Wall Street Journal
Side-effects need to be monitored, says International Monetary Fund Managing Director
FRANKFURT—Subzero interest rates in Europe and Japan are “net positives” for the global economy, International Monetary Fund chief Christine Lagarde said Tuesday, though she warned that the side effects of unorthodox central-bank policies should be closely monitored.
Speaking ahead of the IMF’s Spring meetings in Washington, D.C., next week, Ms. Lagarde praised recent policy moves by the European Central Bank and the U.S. Federal Reserve, and called on governments to play their part by introducing growth-friendly reforms.
“We are on alert, not alarm” on the outlook for the global economy, Ms. Lagarde told an audience at Frankfurt University. She pointed to a “loss of growth momentum” over the past six months, “exacerbated by China’s relative slowdown, lower commodity prices, and the prospect of financial tightening for many countries.” Den Rest des Beitrags lesen »
Posted in Artikel | Verschlagwortet mit: ECB, Euro, Fed, Growth, IMF, Interest, Lagarde, WSJ | Leave a Comment »
Posted by hkarner - 17. März 2016
FURCHE-Kolumne 185 Wilfried Stadler, 17/03/2016
Noch selten interessierte sich eine breite Öffentlichkeit so sehr für Notenbankpolitik wie nach Bekanntgabe des jüngsten Maßnahmenpaketes der EZB. Wer allzu stark im Gespräch ist, läuft allerdings auch Gefahr, ins Gerede zu kommen.
Während es Präsident Mario Draghi im Sommer 2012 noch gelungen war, als Notarzt des europäischen Finanzsystems den Patienten Euro mit unkonventionellen Therapien vor dem Kollaps zu bewahren, stieß die vor gut einem Jahr begonnene Politik des großvolumigen Ankaufs von Staatsanleihen von Beginn an auf viel Skepsis. Das in den USA unter anderen Voraussetzungen durchaus erfolgreiche „Quantitative Easing“ rief in Europa keine vergleichbar positiven Wirkungen hervor. Kaum jemand will deshalb mehr glauben, dass die Senkung des Leitzinses auf Null, eine Erhöhung der „Strafzinsen“ für Einlagen bei der EZB und die Aufstockung der umstrittenen Anleihenkäufe von 60 auf 80 Milliarden Euro pro Monat zur Belebung der Konjunktur beitragen wird. Den Rest des Beitrags lesen »
Posted in weitere Artikel | Verschlagwortet mit: ECB, Furche, Interest, QE, Stadler | Leave a Comment »
Posted by hkarner - 12. März 2016
Barry Eichengreen is Professor of Economics at the University of California, Berkeley; Pitt Professor of American History and Institutions at the University of Cambridge; and a former senior policy adviser at the International Monetary Fund. His latest book is Hall of Mirrors:The Great Depression, the Great Recession, and the Uses – and Misuses – of History.
MAR 11, 2016, Project Syndicate
BERKELEY – The world economy is visibly sinking, and the policymakers who are supposed to be its stewards are tying themselves in knots. Or so suggest the results of the G-20 summit held in Shanghai at the end of last month.
The International Monetary Fund, having just downgraded its forecast for global growth, warned the assembled G-20 attendees that yet another downgrade was pending. Despite this, all that emerged from the meeting was an anodyne statement about pursuing structural reforms and avoiding beggar-thy-neighbor policies.
Once again, monetary policy was left – to use the now-familiar phrase – as the only game in town. Central banks have kept interest rates low for the better part of eight years. They have experimented with quantitative easing. In their latest contortion, they have moved real interest rates into negative territory. Den Rest des Beitrags lesen »
Posted in Artikel | Verschlagwortet mit: Banken, Eichengreen, Europe, G20, Germany, IMF, Interest | Leave a Comment »
Posted by hkarner - 21. Februar 2016
Source: The Economist
Insurers regret their guarantees
FINANCIAL markets may be drawing breath after their recent falls, but one industry in particular has little reason to feel calm. The life-insurance industry has deeper problems than just temperamental markets. Years of doling out goodies from a seemingly bottomless sack are now catching up with these actuarial Santa Clauses, who in their worst nightmares did not imagine that the interest income from their investment portfolios could stay so low for so long.
Insurers tend to be prudent investors who like steady returns, which is why around 80% of their assets are in fixed-income securities. This served them well during the financial crisis, but today—with bond yields at historic lows, and even in negative territory—it hurts their investment income. This is particularly true for life insurers, which own over $21 trillion of the industry’s $28 trillion assets, and rely heavily on this investment income to pay policyholders. Den Rest des Beitrags lesen »
Posted in Artikel | Verschlagwortet mit: Economist, Germany, Insurance, Interest | Leave a Comment »
Posted by hkarner - 6. Februar 2016
Adair Turner, a former chairman of the United Kingdom’s Financial Services Authority and former member of the UK’s Financial Policy Committee, is Chairman of the Institute for New Economic Thinking. His latest book is Between Debt and the Devil.
FEB 5, 2016, Project Syndicate
LONDON – Financial markets were surprised by the Bank of Japan’s recent introduction of negative interest rates on some commercial bank reserves. They shouldn’t have been. The BOJ clearly needed to take some new policy action to achieve its target of 2% inflation. But neither negative interest rates nor further expansion of the BOJ’s already huge program of quantitative easing (QE) will be sufficient to offset the strong deflationary forces that Japan now faces.
In 2013 the BOJ predicted that its QE operations would deliver 2% inflation within two years. But in 2015, core inflation (excluding volatile items such as food) was only 0.5%. With consumer spending and average earnings falling in December, the 2% target increasingly looks out of reach. Den Rest des Beitrags lesen »
Posted in Artikel | Verschlagwortet mit: Central Banks, IMF, Inflation, Interest, Japan, QE, Turner | Leave a Comment »
Posted by hkarner - 18. Dezember 2015
Anatole Kaletsky is Chief Economist and Co-Chairman of Gavekal Dragonomics. A former columnist at the Times of London, the International New York Times and the Financial Times, he is the author of Capitalism 4.0, The Birth of a New Economy, which anticipated many of the post-crisis transformations of the global economy. His 1985 book, Costs of Default, became an influential primer for Latin American and Asian governments negotiating debt defaults and restructurings with banks and the IMF.
DEC 16, 2015, Project Syndicate
The first US interest rate increase since June 2006 is a pivotal moment for the global economy, launching what Mohamed El-Erian, Chief Economic Adviser at Allianz, calls the “great policy divergence,” with repercussions in every region and financial market. The impact will be particularly powerful in emerging countries, where currencies are vulnerable to a rising dollar and tightening liquidity conditions in the US. Project Syndicate’s commentators – some of the world’s preeminent economists and policymakers – have examined the issue from four broad angles.
What is the immediate and longer-term outlook for US monetary policy? Den Rest des Beitrags lesen »
Posted in Artikel | Verschlagwortet mit: Fed, Interest, Kaletsky, Project Syndicate, USA | Leave a Comment »