Daily Archives: July 8, 2011

Claire Jones

Central banks’ intellectual frameworks are a little dowdy and need a bit of a freshening up, says Jaime Caruana, the secretary general of the Bank for International Settlements.

In a speech published on the BIS’s website on Thursday, which was delivered in South Africa last week, Caruana claims the crisis opened up a gap between “the theory and practice of central banking” which has left the profession requiring an “intellectual makeover”.

Nowhere was this more apparent, he says, than with monetary policy. Read more

Claire Jones

Officials must do more to ensure no firm is too big to fail. So says the Basel Committee on Banking Supervision in its report on the progress made by its 27 members in introducing frameworks to resolve ailing banks.

Many of the 27 have made progress in granting powers to save local lenders. But for firms with operations around the globe, the problems are “largely unresolved”. Progress on burden-sharing between states remains “at a preliminary stage”.

No wonder. As Bill Dudley, the president of the Federal Reserve Bank of New York, has said, the bulk of regulation and financial information is contained within national boundaries. And these boundaries, Dudley believes, are formidable obstacles to overcome. Read more