Central Banks

Guest view: An EU election that really matters

20 May 2019

The vote that takes place across the European Union this week is, more than ever before, one on the bloc's future, writes Fabrizio Pagani of Muzinich & Co. And the outcome may catalyse change in countries that have an unstable political outlook, such as Italy and Britain.

The Exchange: John Taylor

13 May 2019

The economist and leading proponent of a rules-based strategy for monetary policy recently convened a powwow at Stanford’s Hoover Institution at which top policymakers brought diverse views on the Fed’s conduct to the fore. He fillets some of the choicest bits with Rob Cox.

Cox: Trump Fed misfire rallies its true believers

9 May 2019

It’s not the first time a U.S. president has tried to meddle in monetary policy. But the failed shoehorning of partisans onto the central bank’s board has bound hawks and doves together in a robust defense of the institution’s independence, as a recent Stanford confab revealed.

Malaysia’s ruling coalition could use a fresh push

7 May 2019

A year after his shock win, Prime Minister Mahathir Mohamad's popularity is flagging. Change has been slow. His party has only tinkered with wasteful subsidies. Scrapping a goods and service tax also left a fiscal hole. It’ll take more to fix tainted institutions and fuel growth.

China loses leverage in battle against debt

6 May 2019

Hours after Donald Trump threatened to raise tariffs on Chinese goods, the central bank made another $40 bln available for small mainland firms to borrow. Prior easing moves helped stocks and housing more than the productive economy. This delicate balancing act looks wobbly.

India Insight: Voters could deliver a strongwoman

6 May 2019

If Narendra Modi’s BJP fails to secure enough seats in an ongoing election, a coalition of regional parties may emerge. One potential leader is West Bengal’s fiery chief, Mamata Banerjee. She has some of the prime minister’s controlling traits, but far looser purse strings.

Fed traditions live to fight another day

2 May 2019

Donald Trump has now lost both his picks for a spot at the U.S. central bank after Stephen Moore joined Herman Cain in taking himself out of contention. Their own shortcomings were to blame more than senators’ respect for the Fed’s independence. But it’s a reprieve all the same.

Irish import new thinking into ECB from Down Under

1 May 2019

Ireland has hired New Zealand’s treasury chief, Gabriel Makhlouf, as its new central bank boss. While not a rate-setter, he arrives from a country that added an employment target to its monetary authority’s inflation goal. And Dublin can brag it is attracting global talent.

Sri Lanka earns a no-confidence discount

29 April 2019

The likes of France and Egypt have suffered economically after tragic attacks, but Colombo’s political infighting and botched death toll are apt to slow any recovery. Even if the IMF and China provide backstops, Sri Lanka looks vulnerable to the worst kind of collapse in tourism.

Hong Kong currency peg seduces yet again

29 April 2019

Hedge fund manager Kyle Bass is the latest investor to lay out a dire case about a long-time link to the U.S. dollar. His rambling argument suggests overleveraged banks and political ructions make the peg precarious. It probably will require a real crisis to prompt any overhaul.

Guest view: Halve Bank of Japan’s inflation target

26 April 2019

Consumer prices are rising more slowly than the central bank’s 2 percent goal. Aiming for 1 percent is acceptable in a country with a low jobless rate, Koichi Hamada, economic adviser to Prime Minister Shinzo Abe argues. Any resulting yen appreciation will be manageable.

Picking the next Bank of England chief

24 April 2019

The hunt is on for a replacement for Governor Mark Carney, who leaves in early 2020. Breakingviews’ interactive yardstick helps sift through the runners and riders.

How to pick the next Bank of England chief

24 April 2019

The hunt is on for a replacement for Governor Mark Carney, who leaves in early 2020. Only talented economists with top-notch central bank experience need apply. Creativity and grit are also required. Breakingviews’ interactive yardstick helps sift through the runners and riders.

Climate risk gets the right kind of oversight

18 April 2019

Central banks presiding over almost half the planet’s GDP plan to treat global warming as a threat to financial stability. It’ll add heft to existing pressure from investors and make it harder for companies and their lenders to ignore the longer-term impacts of climate change.

Indonesian election may change some investor votes

18 April 2019

Polls suggest Joko Widodo won another term, but with a narrow enough victory margin to embolden a belligerent opposition. There were pockets of populist success, too. That will temper hopes he’ll finally tackle energy subsidies and even rigid labour rules to woo foreign money.

Share surge is a bet China is back on track

17 April 2019

The economy grew an unremarkable 6.4 pct in the first quarter. That belies a growing optimism that has turned its stock market into a top performer globally in 2019. An impressive credit rebound has helped. The test will be whether animal spirits alone can keep momentum going.

Axing China’s residency rules makes great stimulus

12 April 2019

Officials are relaxing some restrictions that inhibit internal migrants from relocating to big cities. Local governments worried about budgets stymied progress in the past. But rolling back obsolete regulations now could give a big boost to labour productivity and growth.

Bond market addition will test China’s resolve

11 April 2019

Index inclusion is pulling global investors into the $13 trln market. Implausible ratings and thin liquidity are among fixable teething issues. The real question is if Beijing will meddle with bonds in bad times as it has in stocks. Initial signs are that it might resist.

ECB sop to banks will only help at the margin

10 April 2019

President Mario Draghi is considering ways to ease the pain that negative policy rates inflict on banks, such as tiered deposits in Japan and Sweden. Savings-rich German lenders would benefit most. But any earnings boost would be modest and does nothing to remedy high costs.

Hadas: Biased central bankers beat foolish ones

10 April 2019

President Trump’s pick of loyal supporter Herman Cain as a U.S. Fed governor is a bad idea. Not because of his partisan bias, since central banks are inherently political. But monetary policy is too poorly understood and unpredictable to be entrusted to amateur ideologues.