Money‚ Markets & Macroeconomics

Italy’s north teaches Catalonia a self-rule lesson

23 October 2017

Areas which bring in 30 pct of Italian GDP demanded more autonomy in a referendum. Lombardy and Veneto want to keep more tax revenue. But unlike the Spanish region they stopped short of demanding independence. Orderly voting and a clear outcome will force Rome to negotiate.

Review: The myth of Federal Reserve independence

20 October 2017

America’s central bank is notionally free from the executive and legislative branches. A new book by Sarah Binder and Mark Spindel argues the Fed’s actions are constrained by politics. The trouble is that politicians don’t exercise their "money power" responsibly.

Change at the top is Bank of Italy’s best option

20 October 2017

Governor Ignazio Visco’s uneven track record during the country’s banking crisis undermines the case for renewing his term. Sniping from politicians challenges the central bank’s independence and could hobble his replacement. But even if Visco stays he risks being a lame duck.

Kiwis test new formula in central bank petri dish

20 October 2017

New Zealand was the first nation to give independent rate-setters an inflation target. Now a new government wants to add employment as an objective. The less painful the switch, the more likely others will adopt goals that better suit today’s economic and political realities.

PBOC’s Zhou seeks lasting sway with debt warning

19 October 2017

The central bank governor is suddenly ramping up calls for reform and warning of a possible “Minsky moment.” With the 19th Party Congress in full swing, the soon-to-depart 69-year-old no doubt hopes to burnish his legacy, and ensure a like-minded successor fills his shoes.

Taylor-led Fed would be dangerous in manifold ways

19 October 2017

In addition to the Stanford economist's dogmatic bent for a programmatic monetary policy, John Taylor backs bigger regulatory changes than others in the running to be the next U.S. central bank chief. His laissez-faire ideas about policing Wall Street are loaded with risk.

New U.S. approach can better rein in drone dangers

19 October 2017

The FAA will share oversight of the vehicles with state authorities under a promising test project. Conflicting federal and local rules have caused confusion, with courts adding to the uncertainty. Combining forces can help regulators contain risks in increasingly crowded skies.

Hadas: Time to slay the free market-myth monster

19 October 2017

The oft-told story of vibrant private companies as economic heroes isn’t right, and the common tale of the incompetent state is equally wrong. A new group at University College London can help create a more accurate – and more complex – narrative. The economy is a shared project.

China’s leaders make peace with its old economy

19 October 2017

Output grew 6.8 pct in the third quarter, helped by higher debt, exports and property prices. For all the talk of innovation and deleveraging, the factors driving growth haven't changed. Nor do a few startups signal transformation. For better or worse, Beijing is okay with that.

Global watchdogs may curb U.S. deregulatory push

18 October 2017

The U.S. Treasury will decide whether to recommend scrapping the post-crisis bank resolution regime, as some Republicans urge. But foreign regulators threaten to impose new limits on American firms if it's ditched. That reduces the chances of a major rollback of financial rules.

Chancellor: 1929 is more apt anniversary than 1987

18 October 2017

Today's high stock prices, dollops of leverage and robust profit margins more closely resemble market conditions preceding the Great Crash than the minor blip that took place 30 years ago. Fold in risk parity, ETFs and other trading strategies, and a repeat could be coming.

Viewsroom: President Xi Jinping’s moment

17 October 2017

The Chinese Communist Party’s 19th National Congress kicks off this week. Delegates at the week-long confab will select new leaders, including for key financial and economic posts. But the spotlight will be on Xi and whether he can consolidate his power and extend his reign.

Heads or tails, Mark Carney loses

17 October 2017

British inflation has hit 3 percent, the highest level since 2012. No wonder the Bank of England chief is hinting policy rates may soon rise. Carney’s problem is that he will be criticised for hurting a slow-growing economy if he hikes and accused of inconsistency if he delays.

Cox: Next Fed chair will need unusually thick skin

16 October 2017

The debate over who will lead the central bank is narrowly about hawks and doves. Policy matters, but the broader economic benefits of the Fed’s relative independence may count for more. Whoever gets the job will have to resist Trump's bullying – and stop doing Congress's job.

Venezuela votes make default tightrope trickier

16 October 2017

Regional elections brought President Nicolas Maduro's candidates surprising success, defying polls and economic meltdown. If opposition complaints of fraud are believed in Washington and Brussels, more sanctions may follow. That will make creditors even harder to keep at bay.

Europe poorly placed for Austria’s rightward drift

16 October 2017

The far-right Freedom Party scored well in the country’s election and may enter government. It has been in power before. However, its presence could make Europe’s immigration problem harder to manage, and further integration harder to agree. Centrifugal forces have not gone away.

Review: Black Monday infamy obscures 1980s excess

13 October 2017

In “A First-Class Catastrophe” journalist Diana Henriques argues the 1987 stock-market crash should have prompted smarter regulatory overhaul. She has a point. But scandals earlier in the decade she covers – and some she doesn't – were the real missed opportunities for reform.

EU banks can tolerate a watered-down capital rule

13 October 2017

Global regulators could soon agree on restricting lenders’ leeway to assess their assets’ riskiness. The so-called output floor may be higher than European lenders wanted at 72.5 pct, but the formula involved may prove easier. Less aggressive U.S. watchdogs will help them, too.

Communist Party assault muddles Chinese capitalism

12 October 2017

The government hopes to regain the private sector's confidence even as it tightens its grip, in particular on the critical tech sector. Alignment with state priorities could ease red tape, but bureaucrats make lousy CEOs, and vicious factional politics will distract executives.

Effort to kill Obamacare may only make it stronger

12 October 2017

After failing to coax Congress to repeal the plan, President Trump now wants U.S. agencies to find ways to offer cheaper options with less protection. It subverts his predecessor's signature policy in the short term, but increases the odds that in time government programs expand.