Breakingviews

Hadas: Central banks play with monetary absurdity

September 23, 2016

Monetary authorities have taken recourse in increasingly empty promises. The Bank of Japan's Haruhiko Kuroda has taken this verbal drama to a new and ultimately dangerous level. Central banks could rely on deeds, not words, if their tools and targets were more realistic.

Chancellor: No hyperinflation, just Weimar malaise

September 13, 2016

Central-bank money printing hasn't produced the spiralling prices that plagued the Weimar Republic. It has, though, delivered some of the social disquiet of 1920s Germany. Policymakers urging more extreme monetary actions need to exercise caution lest they get what they wish for.

Iconoclasts needed to topple central bank targets

August 25, 2016

A reboot of global monetary policymaking is the best thing that could emerge from rate-setters’ annual Jackson Hole shindig. An overhaul is pressing as reality upends more and more economic orthodoxies. Ditching simplistic and discredited inflation targets would be a good start.

A checklist for India’s new central bank chief

June 20, 2016

The Reserve Bank of India needs a new governor after Raghuram Rajan’s premature departure. The ideal candidate would support reforms underway and have some experience as an international macro-economist. Crucially, though, he or she needs to be able to stand up to the government.

Review: Stop blaming the world’s central bankers

April 8, 2016

That’s the message of a new book, “The End of Alchemy”, from the former governor of the Bank of England, Mervyn King. It doesn’t completely wash. Low rates bear much responsibility for seeding the financial crisis - and it was central banks, after all, that set them.

Chancellor: Lessons from the Mississippi Bubble

March 23, 2016

This year marks the 300th anniversary of the start of John Law’s ambitious, and ultimately failed, economic experiment. Much like today’s central bankers, Law thought printing banknotes and forcing interest rates lower would solve all of France’s problems. He was so very wrong.

Chancellor: Buffett’s U.S. optimism long-term valid

March 1, 2016

In his annual shareholder missive, the Oracle of Omaha rejects arguments, by Larry Summers and others, that America has entered a period of “secular stagnation.” However, the Berkshire Hathaway chairman’s optimism looks misplaced for now thanks to distortive monetary policies.

Banks’ hybrid hissy fit is no disaster

February 18, 2016

Fears that Deutsche Bank may stop coupons on hybrid debt took the bank to crisis. That will be seen as proof that hybrids are no match for real equity. Yet the mess was caused by vague regulators and lazy investors. Without these obstacles, hybrids can still play a role.

Chancellor: Negative rates, negative implications

February 12, 2016

The latest weapon brandished by central banks is supposed to boost economic growth and ward off deflation by punishing cash hoarders. In practice, this radical policy damages credit creation, fuels bubbles, threatens civic freedoms and spooks the living hell out of markets.

Dear Draghi: Time to buy bank bonds

February 12, 2016

Bank shares have slumped and bank bond yields are up. ECB chief Mario Draghi can stop the rout from damaging the economy by buying lenders’ debt. The moral hazard concerns are big, but manageable. Breakingviews imagines a memo from a bank CEO.