Rising gold prices and recovering financial markets have caused a 10bn CHF profit for the Swiss central bank.
Switzerland has exceptionally large gold reserves for the size of its economy, at about 1,040 tonnes, or $35bn. Indeed, the country ranked second in the world in our gold security ranking. The rising value of gold contributed about 7.3bn CHF to the profits. Foreign exchange positions made up much of the rest, at about 2bn CHF. Read more
Lending levels may be too high in aggregate, but farmers aren’t getting enough of the pie. So says the Chinese central bank, which has called for financial innovation and increased levels of rural lending.
Banks should issue more microloans to farmers to foster rural industries and urbanization, said Liu Shiyu, deputy governor of the People’s Bank of China. Rural credit co-operatives, village banks, microcredit companies and new types of financial institution should all be used to help rural development. Read more
Debate on the nationalisation of the South African central bank has been reignited after the head of the ANC submitted a document questioning the bank’s current ownership, raising fears of higher inflation.
ANC Secretary-General Gwede Mantashe asked: “Why have we been reluctant to even open the discussion on the role of the state in the banking industry? [We should also ask] why the South African Reserve Bank is one of less than five central banks in private hands in the world.”
A change to state ownership of the shareholder-owned bank could mean higher inflation. The left has complained that the bank focuses too narrowly on maintaining low inflation. They want policymakers to consider employment and growth when setting interest rates. Read more
Time for the BoJ to do something, but what?
The Bank of Japan’s first monetary policy meeting of the year starts today and concludes tomorrow, Tuesday 26th, when we’ll hear about any change in policy.
With ample evidence that deflation is taking hold again, a majority of economists are looking for further ‘broadly defined quantitative easing’ from the BoJ, although not necessarily at the current meeting. Political pressure for some kind of action is also mounting.
Officials at the BoJ, however, appear to be: (a) skeptical about how much quantitative easing can do to halt deflation; and (b) reluctant to be seen to finance the fiscal deficit through the obvious step of buying more government bonds. Read more
| About this blog | Blog guide |
Chris Giles has been the economics editor of the Financial Times since 2004. Based in London, he writes about international economic trends and the British economy. Before reporting economics for the Financial Times, he wrote editorials for the paper, reported for the BBC, worked as a regulator of the broadcasting industry and undertook research for the Institute for Fiscal Studies. RSS
Michael Steen, Frankfurt bureau chief, covers the ECB and the eurozone's economies. He joined the Financial Times in 2007 as Amsterdam correspondent and later worked as a front page news editor in London. Before joining the FT, he spent nine years as a correspondent at Reuters, mostly in foreign postings that included a previous stint in Frankfurt, as well as Moscow, Kiev and central Asia. He read German and Russian at Cambridge.RSS
Robin Harding is the FT's US economics editor, based in Washington. Prior to this, he was based in Tokyo, covering the Bank of Japan and Japan's technology sector, and in London as an economics leader writer. Robin studied economics at Cambridge and has a masters in economics from Hitotsubashi University, where he was a Monbusho scholar. Before joining the FT, Robin worked in asset management and banking. RSS
Ralph Atkins, capital markets editor, has been writing for the Financial Times for more than 20 years following an economics degree from Cambridge. From 2004 to 2012, Ralph was Frankfurt bureau chief, watching the European Central Bank and eurozone economies. He has also worked in Bonn, Berlin, Jerusalem and Brussels. RSS
Claire Jones is Money Supply economics team writer, based in London. Before joining the Financial Times, she was the editor of the Central Banking journal and CentralBanking.com. Claire studied philosophy and economics at the London School of Economics. RSS
