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Three pillars of policy tightening by central banks
Business, Paul Donovan, Published on 27/10/2014
» Central bank policy is already being tightened. The problem is that in the world after quantitative policy, central bank policy can no longer be represented by a simple interest rate line on a chart. Policy has become more complex, and that complexity is something that markets seem to overlook. Central bank policy now rests on three pillars, and tightening in any of these three policy areas will restrict economic activity.
Money pumping may lead to a currency war that leads to nowhere
Business, Paul Donovan, Published on 28/09/2012
» The US Federal Reserve, the European Central Bank (ECB) and the Bank of Japan have all applied additional easing measures to their monetary policy management in the past couple of months. The Bank of England got there first with additional easing announced earlier in the year. The Swiss National Bank is printing money on a scale that is almost Zimbabwean in its volume. Are these salvos in a war to devalue currencies _ a war that must ultimately fail (for you have to have one strong currency to devalue against)? Or are central banks trying to devalue their currencies against commodities such as oil?
What the euro means for Asia
Business, Paul Donovan, Published on 21/02/2012
» The euro should not exist. In a perfect world (run by economists) the euro would never have been created. Sadly, however, the world is not perfect _ and it is run by politicians. The result is an entirely dysfunctional monetary union.