Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘King’

World economy is sleepwalking into a new financial crisis, warns Mervyn King

Posted by hkarner - 22. Oktober 2019

Date: 21-10-2019
Source: The Guardian Larry Elliott in Washington

Past crashes spawned new thinking and reform but nothing has changed since 2008 banking meltdown, says former Bank of England boss

Lord King said resistance to new thinking meant a repeat of the financial chaos of the 2008-09 period was looming.

The world is sleepwalking towards a fresh economic and financial crisis that will have devastating consequences for the democratic market system, according to the former Bank of England governor Mervyn King.

Lord King, who was in charge at Threadneedle Street during the near-death of the global banking system and deep economic slump a decade ago, said the resistance to new thinking meant a repeat of the chaos of the 2008-09 period was looming. Den Rest des Beitrags lesen »

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The Alchemy Of The Greek Economy

Posted by hkarner - 31. Oktober 2016

Monday, October 31, 2016, Observing Greece Kastner

The former Governor of the Bank of England, Mervyn King, wrote a book titled „The End of Alchemy: Money, Banking, and the Future of the Global Economy„. In it, he discusses the future of the Eurozone and makes the following comments about Greece:

„It is evident, as it has been for a very long while, that the only way forward for Greece is to default on (or be forgiven) a substantial proportion of its debt burden and to devalue its currency so that exports and the substitution of domestic products for imports can compensate for the depressing effects of the fiscal contraction imposed to date. Structural reforms would help ease the transition, but such reforms will be effective only if they are adopted by decisions of the Greek people rather than being imposed as external conditions by the IMF of the European Commission. The lack of trust between Greece and its creditors means that public recognition of the underlying reality is some way off“. 

While King does not use the term „Grexit“, he obviously says that Greece should leave the Eurozone. At the same time, he suggests that Greece could consider re-joining the Eurozone a few years later after a new equilibrium has been reached, if it so wished. Den Rest des Beitrags lesen »

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Toynbee’s Europe

Posted by hkarner - 5. August 2016

Very much to the roots. Excellent: Charles Gave is the partner of the equally gorgeous Anatole Kaletsky. (hfk)

By Charles Gave, Chairman, Gavekal. Published by John Mauldin. Charles Gave

August 3, 2016

In A Study of History the great Arnold Toynbee explained that the role of “elites” in any society is to handle challenges that allow the group to survive and move on to the next phase of their shared journey. If bad solutions are offered up then problems will intensify and pressure will arise for a change in the elite. This can happen in various ways: through elections in a best case scenario, a change of regime as with France’s forth Republic which failed to properly handle decolonization, a collapse in the political structure such as befell the Austrian empire at the end of WWI, or, most dramatically, the overthrow of a civilization as in South America with the arrival of the Spaniards or in Egypt when the Muslims took over.

In Europe, the main problem for a century or more was the internecine rivalry between Germany and France which led to three wars that became progressively more destructive. By the time Europe’s exhausted elites reached 1945, it was obvious that war was not going to solve anything and hence a new solution was tried in the shape of “political” Europe. The plan worked to such an extent that new challenges were spawned such as the handling of Germany’s reunification, managing the effects of an aging population and integrating lots of immigrants from a genuinely different civilization. Den Rest des Beitrags lesen »

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Why Britain is unenthusiastic about Michel Barnier’s Brexit job

Posted by hkarner - 30. Juli 2016

Date: 29-07-2016
Source: The Economist

Barnier CCIT WAS a “declaration of war”, according to the livelier elements of the British press. Michel Barnier, the smooth-talking, silver-haired French politician who has been appointed to run a Brexit task force inside the European Commission, may not look like a man spoiling for a battle. But the decision by Jean-Claude Juncker, the commission’s president—to appoint a man well known for his rows with Britain to a job which is bound to generate more of them—certainly looked like a provocation.

Mr Barnier has the experience for the job. He has bounced between senior positions in Paris and Brussels for more than 20 years, serving (briefly) as France’s foreign minister and putting in two stints inside the commission. It is the second of those that has some in Britain sweating. Between 2010 and 2014 Mr Barnier was the internal-markets commissioner, a job in which he oversaw the regulation of financial services. In those post-Lehman days, a torrent of legislation poured forth from Brussels, and Mr Barnier clashed regularly with the City (and the British government) on issues like bankers’ bonuses and capital-buffer requirements. One row with Mervyn King left the mild-mannered Bank of England governor bashing the table in fury. But by the end of Mr Barnier’s term he had won the grudging respect of many in the City who appreciated his conciliatory approach to the job. Den Rest des Beitrags lesen »

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Lord Mervyn King: ‚Forgive them their debts’ is not the answer

Posted by hkarner - 1. März 2016

King The End of Alchemy
“I have read umpteen books about the financial crisis of 2007–2008 and its lessons. This is the cleverest one, brimming over with new ideas. While other ‘lords of finance’ publish memoirs, King has produced a brilliant analysis not only of what went wrong in the global financial system but also of what went wrong in economics itself.” (Niall Ferguson). I can only full-heartedly share Niall Ferguson’s observations. Available to order from March 3 in the UK, American version from March 16. (hfk)
In an exclusive extract from his new book, Lord King takes the euro area nations to task for their lax loan repayment policies, warning that the EU cannot risk new debt being created on the same scale as before
Mervyn King, 28 February 2016 • 10:13pm, The TelegraphKing Mervyn

What is the relationship between money and nations?

The main building of the International Monetary Fund in Washington DC is shaped roughly as an ellipse. As you walk around the corridor on the top floor, on one side are symbols of each of the member nations. On the opposite side are display cabinets of the banknotes used by those countries. There is a remarkable, almost uncanny, one-to-one relationship between nations and their currencies. Money and nations go hand in hand.

European Monetary Union (EMU) is the most ambitious project undertaken in monetary history. EMU has not proved to be an easy marriage, with the enterprise trying to navigate a safe passage between the Scylla of political ideals and the Charybdis of economic arithmetic.

How long this marriage will last is something known only to the partners themselves; outsiders cannot easily judge the state of the relationship. Den Rest des Beitrags lesen »

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Business vs. Economics

Posted by hkarner - 5. November 2014

What brings me to the question: the economic wisdom, or lack thereof, of economists.(hfk)

Date: 03-11-2014
Source: Paul KrugmanKRUGMAN4

TOKYO — The Bank of Japan, this country’s equivalent of the Federal Reserve, has lately been making a big effort to end deflation, which has afflicted Japan’s economy for almost two decades. At first its efforts — which involve printing a lot of money and, even more important, trying to assure investors that it will keep printing money until inflation reaches 2 percent — seemed to be going well. But more recently the economy has lost momentum, and last week the bank announced new, even more aggressive monetary measures.

I am, as you might guess, very much in favor of this move, although I worry that the policy might nonetheless fail thanks to fiscal mistakes. (More about that later.) While the bank did the right thing, however, it did so amid substantial internal dissent. In fact, the new stimulus was approved by only five of the bank board’s nine members, with those closest to business voting against. Which brings me to the subject of this column: the economic wisdom, or lack thereof, of business leaders.

Some of the people I’ve spoken to here argue that the opposition of many Japanese business leaders to the Bank of Japan’s actions shows that it’s on the wrong track. In saying this, they’re echoing a common sentiment in many countries, including America — the belief that if you want to fix an ailing economy, you should turn to people who have been successful in business, like leaders of major corporations, entrepreneurs and wealthy investors. After all, doesn’t their success with money mean that they know how the economy really works?

Actually, no. In fact, business leaders often give remarkably bad economic advice, especially in troubled times. And I think it’s important to understand why. Den Rest des Beitrags lesen »

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Central banks will be financing governments on a permanent basis

Posted by hkarner - 7. April 2014

Date: 06-04-2014
Source: The Economist: Buttonwood
Subject: Now you see them

EVERYBODY would like a rich uncle to help them when times are hard. And that is the role central banks have been playing in recent years, easing monetary policy at a time when economic output is below trend and the scope for fiscal stimulus has been reduced.

The most controversial aspect of this support has been “quantitative easing” (QE), the creation of money to buy assets, mostly government bonds. Central banks resorted to this expedient in the depths of the crisis as interest rates approached zero. The role of QE was to provide liquidity to the system and to ensure that long-term rates did not rise too far.

The policy had the useful side-effect, as far as governments were concerned, of providing a willing buyer for their bonds at a low interest rate. To be fair, central banks did not buy in the primary market: that is, when the bonds were issued. But the fact that they were buying in the secondary market gave an incentive for private-sector buyers to stump up. Den Rest des Beitrags lesen »

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Are China’s Banks Next?

Posted by hkarner - 1. November 2013

Date: 30-10-2013
Source: Project Syndicate; Simon JohnsonJohnson cc1

WASHINGTON, DC – America’s recent bout of dysfunctional politics and the eurozone’s on-again, off-again crisis should, on the face of it, present a golden opportunity to China. To be sure, the malaise in the United States and Europe is likely to hurt Chinese exports; but, over the long term, China wants to reorient its economy toward domestic consumption. With the Tea Party wing of America’s Republican Party scaring investors out of the dollar, interest in the Chinese renminbi’s potential as an international reserve currency can only increase.

This will help China to attract more investors seeking to diversify their portfolios. Chinese government debt will become an important global benchmark asset, which should help its private sector to attract funding on reasonable terms, while the predominance of the US Federal Reserve in determining worldwide monetary conditions would presumably diminish. The decades-old shift to a multipolar world for manufacturing could thus lead to a more multipolar currency world, with the renminbi as an important player. Den Rest des Beitrags lesen »

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