MPC’s Dale on QE, funding costs, and closure
Spencer Dale, the Bank of England’s chief economist, was at Bloomberg’s London headquarters on Tuesday to deliver a talk that attempted to de-bunk a few myths circulating about quantitative easing.
The highlights of Mr Dale’s speech are covered here by the FT’s economics correspondent Norma Cohen.
However, there was also much that was of interest in the Q&A that followed. Read more
The ECB will always prefer Noyer’s bazooka
The European Central Bank’s reluctance to ramp up its government bond purchases has led to it being viewed as the most conservative, most dogmatic of the major central banks.
True, as evinced by the miniscule scale of last week’s bond purchases, the ECB has been far less amenable than its counterparts to do anything with a mere whiff of monetary financing attached to it. But the view of the ECB as unbending is unfair when it has been far more willing, and quicker, to relax the terms on which it provides banks with cash than either the Bank of England or the Federal Reserve.
As Christian Noyer, governor of Banque de France, said last week, the move to expand massively the ECB’s support for banks by not only introducing unlimited three-year loans but broadening the list of eligible collateral, was “our bazooka”. He also suggested that the funds borrowed from the ECB could be used to buy government bonds.
That the ECB is far more comfortable with such a “bazooka” than a more direct solution such as, say, capping yields on government debt, may owe much to one of the more arcane aspects of the history of the eurozone’s central bank. Read more
Coeuré update: off-message?
A chink in the European Central Bank’s tough stance on bond buying? Benoît Coeuré, nominated by France to join the ECB executive board, told the European Parliament late on Monday that bond purchases might have to be stepped up. He thus went beyond the comments in his written evidence, which I wrote about in a previous post.
“If we feel there is a deterioration in terms of the transmission of monetary policy, then we should do more,” Mr Coeuré said, according to Reuters. Read more
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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
