ECB has bright idea for targeted bank-bashing

November 26, 2015

Imposing a staggered penalty on banks that hoard cash is one of many ways to ease policy being discussed by the European Central Bank. Such levies have drawbacks. But at least a split-level charge would encourage the biggest hoarders to boost cross-border lending.

ECB hits European banks where it doesn’t hurt

November 11, 2015

Europe’s banking supervisor wants to fast-track the phasing out of bogus capital like deferred tax assets. Greater harmonisation is exactly what Frankfurt should be pushing. But the ECB’s inability to tell national governments what to do will limit the fallout for most lenders.

Fed feeds Goldman conspiracy-theory machine

November 10, 2015

Hiring former dealmaker Neel Kashkari to run Minneapolis means the investment bank’s alumni are in charge of three of the central bank’s 12 regional branches. It’s great fodder for those seeking evidence of a system in thrall to Wall Street and Goldman. The reality is less juicy.

Greek banks get marginally more investable

November 2, 2015

ECB stress tests revealed a 14 bln euro capital hole. The tests were doubly tough: the pass mark was high, and the state will not prevent shareholder dilution. Yet banks are stuck with bad loans and the economic outlook is unclear. Greek bank equity is still a bet for the brave.

Review: Fed founders wouldn’t recognize their baby

By Edward Chancellor
October 30, 2015

In “America’s Bank,” Roger Lowenstein shows how the Federal Reserve was created to act as lender of last resort and little more. Since then, there’s been mission creep with many ill consequences. A century after its foundation, the central bank needs to address its failings.

Uncertain central bankers leave markets stranded

October 16, 2015

Investors can’t get a straight story on when interest rates will rise, or why. And they’re not sure whether delay is good or bad for stocks. So markets behave capriciously. In the murk, one thing is becoming painfully clear – the diminishing effectiveness of all monetary policy.

“People’s QE” is more sensible than unconventional

By Edward Hadas
September 24, 2015

The new Labour leader in the UK wants the government to use newly created money to pay for infrastructure investments. The gains are clear. It’s simpler and more just than borrowing, healthier for the financial system and not necessarily more inflationary. The risks are hypothetical.

Review: Ben Bernanke and a global monetary plague

By Edward Chancellor
August 28, 2015

Ever since the collapse of Lehman Brothers, the Federal Reserve has engaged in financial experimentation that has delivered the weakest rebound on record while spreading deleterious effects around the globe that author Brendan Brown, in a forthcoming book, likens to a plague.

Oil price slide complicates life for central banks

August 4, 2015

Brent is back down at $50 a barrel. Bond prices show this is eroding investor confidence that inflation will pick up. Central banks usually ignore the temporary impact of commodity price swings, but can’t afford to be complacent with inflation and policy rates already so low.

Hugo Dixon: The optimist’s guide to Greece

By Hugo Dixon
July 27, 2015

There are so many ways things could go wrong in Greece that it’s easy to miss how things could also go right. The good scenario involves the ECB buying up Greek bonds, the lifting of capital controls and a deal on debt relief – all by year-end.