Daily Archives: December 6, 2011

Claire Jones

Last week, Sir Mervyn King added to the gloom by saying that the eurozone woes are creating a “spiral” characteristic of a systemic financial crisis.

It would appear that the Bank of Japan is similarly concerned that we could be in for a shock of Lehman-like proportions.

This from deputy governor Hirohide Yamaguchi:

  Read more

Claire Jones

Because monetary policy acts with a lag, it has to rely on forecasts.

However, as the Bank of England’s attempts at prediction have illustrated, central banks’ forecasts, and indeed those of most economists, tend to be pretty dire.

This is what Svante Öberg, first deputy governor of Sweden’s Riksbank, refers to in a speech out today as the “Catch-22 of monetary policy.” So what’s a central banker to do?  Read more