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from MacroScope:

Shock now clearly trumps transparency in central bank policymaking

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The days of guided monetary policy, telegraphed by central banks and priced in by markets in advance, are probably coming to an end if recent decisions around the world are any guide.

From Turkey, which hiked its overnight lending rate by an astonishing 425 basis points in an emergency meeting on Tuesday, to India which delivered a surprise repo rate hike a day earlier, central banks are increasingly looking to "shock and awe" markets into submission with their policy decisions.

A wide sample of economists polled by Reuters on Monday already expected a massive rise of 225 basis points by Turkey's central bank to stop a sell-off in the lira. Instead it doubled the consensus and opted for the highest forecast.

Gizem Oztok Altinsac, chief economist at Garanti Securities in Istanbul, who correctly called the size of the Turkish rate hike said:

from India Insight:

Little public outrage as politicians unite against transparency

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(Any opinions expressed here are those of the author and not of Thomson Reuters)

India's political parties are united, for a change. It's not over women's safety or how many poor people the country has. They have closed ranks against moves to make parties accountable under the Right to Information (RTI) law.

The Cabinet has asked for changes in the RTI Act that, once approved by parliament, would exclude political parties from being covered by it. In other words, the Congress-led government wants to amend the very law that it once championed.

from The Great Debate:

Fed chair fight raises crucial questions for Obama

The media circus over who will be the next chairman of the Federal Reserve is, on the one hand, an unwelcome spectacle at a time when uncertainty over the outlook for U.S. output and jobs growth is high. While previous leadership transitions have brought forth speculation about candidates, the current “contest” is odd. President Obama, after ungraciously commenting on Chairman Bernanke’s reappointment prospects, wisely stepped back for a period of reflection and decision about “what” he wants as well as “who” he wants.

On the other hand, this period also offers an opportunity for the White House to turn questions for the next chairman to consistent questions about the administration’s own economic policies. Four areas provide an immediate point for comparison.

from MacroScope:

St. Louis blues: Fed’s Bullard gets a sentence

Ellen Freilich contributed to this post

Talk about getting a word in edgewise. St. Louis Federal Reserve Bank President James Bullard got almost a full sentence in the central bank’s prized policy statement.

Some background: Bullard dissented at the Fed’s June meeting, arguing that, “to maintain credibility, the Committee must defend its inflation target when inflation is below target as well as when it is above target.” The latest inflation figures show the Fed's preferred measure at 0.8 percent, less than half the central bank's target.

from MacroScope:

Loose lips sink ships? Fed’s latest transparency sows confusion, says Mizuho’s Ricchiuto

The complexity of non-traditional monetary policy is hard enough to explain to other economists and policymakers. Market participants prefer sound bites, opines Steven Ricchiuto, chief economist at Mizuho Securities USA in a note. As such, the more the Federal Reserve Chairman Ben Bernanke tries to explain the Federal Open Market Committee's position on tapering and policy accommodation the more he confuses the message, Ricchiuto says.

The problem is fundamental to the nature of monetary policy. According to the Chairman, monetary policy accommodation is adjusted through the Fed Funds rate. Quantitative Easing (QE) is a separate policy. Yet he has also said that tapering is simply reducing accommodation, not tightening. These pronouncements work at cross purposes and ignore how the markets read policy. For the markets, QE is an extension of policy into non-traditional tools. Therefore, tapering is tightening. There is no such thing as reducing accommodation for market participants.

from The Great Debate:

A blueprint to make banks behave

Banking integrity has become an oxymoron. Top bankers need to change this and take responsibility for tackling ethical issues. For this to happen, every part of the organization – from senior management to human resources managers to those on the trading floor and beyond – should be assessed according to the contribution it makes to promoting ethical values, not just the bottom line.

The investigations into the LIBOR rate-rigging scandal showed how commonplace bribery among dealers had become. For example, between September 2008 and August 2009 a single trader at the Royal Bank of Scotland had made corrupt payments to interbank brokers on 30 occasions, by means of risk-free transactions known as "wash trades."

from David Rohde:

Obama’s legacy of secrecy

John Brennan’s testimony before the Senate Intelligence Committee on Thursday was a microcosm of the Obama administration’s approach to counterterrorism: The right assurances, with little transparency.

Brennan said the United States should publicly disclose when American drone attacks kill civilians. He called waterboarding “reprehensible” and vowed it would never occur under his watch. And he said that countering militancy should be “comprehensive,” not just  “kinetic,” and involve diplomatic and development efforts as well.

from The Great Debate:

Apple and Samsung’s cone of silence

Apple and Samsung, you might have heard, have spent the last many months in a California courtroom haggling over who violated whose patents. At the end of August, Apple was awarded more than a billion dollars in damages by a jury, and the Samsung is now claiming jury misconduct. Just last week a U.S. appeals court threw out the judge’s ban on Samsung’s Galaxy Nexus phone. The whole situation is, really, turning into a bit of a confusing mess.

Also messy: a lesser-known but hugely important struggle among Samsung, Apple, and those members of the press trying to write about the court battle. While otherwise adversaries, the two companies have joined forces to keep some of the evidence in the case off the public record. But how much secrecy in the Apple v. Samsung proceedings is too much for the public to tolerate? It’s a meta legal question, and one that might not have the same billions directly at stake as the main event. But the outcome of the dispute about the transparency of our courts is central to understanding the future of these big tech trials. And there will likely be plenty more of those.

from The Human Impact:

Corruption in water sector increases hunger risk – experts

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Stamping out corruption in the water sector is crucial to boosting global food production as world population growth increases pressure on water supplies, according to experts meeting at World Water Weekin Stockholm.

Corruption in the water sector is already a major problem for farmers and it’s likely to get worse as competition for water increases, a joint statement released by the Water Integrity Network (WIN), Transparency International and the U.N. Development Programme (UNDP) Water Governance Facility at the Stockholm International Water Institute (SIWI) said.

from The Great Debate:

The people’s business is none of our business

Politicians have always loved to keep the political process as shrouded in mystery as possible. But for a brief time, thanks to the increased use of computers, it seemed that technology would finally shine some needed sunlight on the political process. Due to the extensive virtual paper trails created by emails, and assisted by ever-improving search technology, what went on between government officials was opened up for public examination in new and unexpected ways.

But now, political figures are fighting back. As reports continually show, politicians are pushing to ensure that the people’s business is none of your business.

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