Daily Archives: September 14, 2009

Krishna Guha

San Francisco Fed chief says interest rates today would be “well below this zero bound” if such a thing were possible. Her comments show that she is a very, very long way away from voting to raise rates, writes Krishna Guha of the Financial Times 

This debate is taking place on the FT’s Arena blog:

Four seasons have now passed since the highest-profile casualty of the financial crisis, Lehman Brothers, went under. Since then, all over the world, politicians, regulators and central bankers have focused on what needs changing to prevent another meltdown. Of course, crises come and go. But at the very least have banks learned their lesson? They would argue they are better capitalised than 12 months ago and have exited the nasty products that shot holes in their balance sheets. Banks might also say that the consolidation of the likes of Bear Stearns, Merrill Lynch and HBOS into healthier rivals can only strengthen the sector. The regulatory environment will certainly be tougher. But there are plenty who still worry history might repeat itself. After all, most banks largely look like they did pre-Lehman, albeit with fewer people. They also remain highly leveraged and remuneration still rewards risk. Do you think banks have done enough? Join the debate. Click on comment

Chris Giles

Another good speech by Andy Haldane, the Bank of England’s head of financial stability. Noting that the word trust derives from the same latin root as credit (as our colleague Gillian Tett pointed out months ago), he asks how the financial services sector can best regain trust. Smaller, more local, perhaps mutual and certainly more diverse banks is his answer for the long term. Unlike the G20, he is not too keen on regulation as a panacea (word cloud of his speech to the left).

“One reason why regulation might not be the whole answer is that trust in financial regulation is itself one of the casualties of crisis.”

And before trust is restored with the private sector, he recognises the public sector will have to step in. 

Chris Giles

While we are doing anniversaries, it is two years since Mervyn King launched a tirade against moral hazard and bailing out bankers. He had to do it all the same. But his words sound better two years on when we are thinking about devising a new and safer banking system. 

Krishna Guha

The Fed wants a clean break from the mortgage-backed security market. It will complete its current purchase programme. But then it wants to stop completely, writes Krishna Guha 

Ralph Atkins

What will happen to ECB profits, asks Ralph Atkins in a Financial Times blog 

Chris Giles

Alistair Darling is getting into election campaign mode and clearly thinks Adair Turner of the FSA is talking nonsense. All this and more in an interview with the Financial Times, writes Chris Giles 

Ralph Atkins

Jean-Claude Trichet on opera and cooking: children ask much better questions than journalists, writes Ralph Atkins of the Financial Times  

Well-being should be reflected in economic data, a commision will report today. This as the OECD sees positive signs in the world economy but retail data – and an escalating trade war – suggest otherwise 

Ralph Atkins

Demand in the ECB’s next offer of one-year liquidity is likely to be much lower than in June, writes Ralph Atkins of the Financial Times