Monthly Archives: January 2012

Ralph Atkins

The European Central Bank gets criticised for many things these days. On one issue it can offer little by way of defence: the complete lack of women in its top ranks. Gender balance has been “blatantly disregarded” at the euro’s monetary guardian, according to Sharon Bowles, chairwoman of the European Parliament’s economic and monetary affairs committee. She has a point: not one member of the ECB’s six-strong executive board or 23-strong governing council is female.

One possible (sort of) excuse is that female central bankers are a rarity globally. Barely more than 6 per cent of governors globally are women, according to the central bank directoryRead more

Ralph Atkins

One of Mario Draghi’s first acts after becoming European Central Bank president on November 1 was to make clear the limitations of the ECB’s government-bond-buying programme. It would be temporary, limited and aimed purely at restoring the functioning of markets, he said at his first press conference. The ECB would not act as “lender of last resort” to governments, he said – helping reassure sceptical Germans. The impression he gave was that the ECB had serious misgivings about setting the wrong incentives for governments and would wind down the programme as soon as possible.

So how is he doing? Read more

Claire Jones

Our week ahead email helps you track the most important events in central banking. To see all of our emails and alerts visit www.ft.com/nbe

Bernanke testimony

Fed chairman Ben Bernanke is due to speak on the economic outlook and federal budget situation on Thursday. He’s up in front of the House Committee on the Budget at 10.00 local time (15.00 GMT) on Thursday. Read more

Claire Jones

The impossibility of knowing what would have happened without quantitative easing, ie, the so-called “counterfactual”, means that estimating the impact asset purchases have had on the UK economy is more art than science.

Still, that doesn’t stop the Bank of England trying.

Weeks before announcing another £75bn-worth of asset purchases last October, the Bank published research saying that the first round of QE had meant growth was between 1.5 per cent and 2 per cent higher than it would have otherwise been.

The Bank for International Settlements has had a go too.  Its findings, published in December, found that QE had far less of an effect on gilt yields than the Bank had assumed.

In anticipation of more money printing next month, the Bank on Friday published three new papers which support its view that QE has substantially boosted the UK economy.  Read more

Ralph Atkins

The European Central Bank is maintaining its silence over its Greek bond holdings, but the debates continue behind closed doors. On one point its governing council appears more-or-less united: the ECB cannot voluntarily accept losses on its holdings, on which it spent an estimated €35bn to €40bn. To do so would breach the European Union ban on monetary financing – central bank funding of governments. Germany’s Bundesbank has said as much publicly.

More interesting is what the ECB would do if the Greek government sought to impose losses. Read more

Claire Jones

This from the FT’s US economics editor Robin Harding in Washington and Michael Mackenzie in New York:

The US Federal Reserve predicted that interest rates will stay on hold at least through late 2014 in a dramatic extension to the period for which it expects to keep rates low.

 Read more

Claire Jones

To the chagrin of those at the Eurotower, the IMF is urging the ECB to take a hit on its €40bn in Greek government debt.

The ECB is worried hugely about the principle of it taking a loss, or foregoing profits. But there is also the threat to its own finances: the ECB, like many a central bank, does not have much in the way of a capital buffer.

How would the ECB’s finances look in the event of a Greek default? Well this article, published back in May by the FT’s Frankfurt bureau chief Ralph Atkins, goes some way to answering this question. 

 Read more

Ralph Atkins

Peter Praet. Image by Getty.

Peter Praet. Image by Getty.

Peter Praet, the European Central Bank executive board member who took over responsibility for its economics department earlier this month, chose – probably wisely – a German newspaper for his debut interview.

Talking to the Frankfurter Allgemeine Zeitung, the German-born Belgian sounds tough – but does not actually explicitly rule out much in terms of possible policy actions. To that extent he looks entirely in step with Mario Draghi, the ECB president. Read more

Robin Harding

The new FOMC interest rate forecasts will be released today with the Fed’s Summary of Economic Projections at 2pm. A lot of the commentary suggests that the forecasts of the first rate rise will be heavily clustered in 2014. These are illustrative examples from Credit Suisse: Read more

Ralph Atkins

Beatrice Weder di Mauro, member of Germany’s council of economic experts, has emerged as a possible candidate to join the board of the Swiss National Bank, following the resignation of Philipp Hildebrand .

In Davos, Switzerland, today, she refused to comment on rumours about her future, reports BloombergRead more