Talk Rises About Sovereign Debt Cancellation

By: Monday October 22, 2012 6:58 am

It’s an intriguing question: why can’t central banks around the world, practically all of whom have bought up sovereign debt, just cancel it? Countries would get more headroom on their debts, inflation would rise but not necessarily at an unmanageable rate. It would have the effect of hitting the reset button.

Fed’s Preferred Monetary Policy Tool, Quantitative Easing, Mostly Benefits the Rich

By: Friday August 24, 2012 10:53 am

I can think of several ways that the Federal Reserve could be aiding the US economy. Another round of quantitative easing isn’t necessarily one of them. The Bank of England produced a study on the distributional effects of QE, and found that, predictably, the benefits go to the rich. By pushing up a range of [...]

ECB’s Mario Draghi Promises “Whatever It Takes” to Save the Euro

By: Friday July 27, 2012 8:55 am

European markets have surged over the last 24 hours, basically entirely due to a speech by Mario Draghi, the head of the European Central Bank. He said that his organization would do “whatever it takes” to save the euro, and that was apparently all it took. In a speech in London, ECB chief Mario Draghi [...]

Central Bankers Consider Ending Libor Altogether

By: Thursday July 19, 2012 6:55 am

We don’t know what the upshot of the Libor investigations will be, but if nothing else, it has raised awareness of what a fragile international financial system we have. The idea that 16 banks just send a slip of paper to the British Banking Association every day, and that rate becomes a global standard for [...]

Banks Continue to Wriggle Out of New International Standards

By: Tuesday January 10, 2012 8:55 am

Major banks caught a break when federal regulators determined that financial institutions could plunge below international liquidity levels in the event of a financial crisis. Banks will be allowed go below minimum liquidity levels set by global regulators during financial crises to avoid cash-flow difficulties. “During a period of stress, banks would be expected to [...]

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