Monthly Archives: July 2012

Claire Jones

Our week ahead email helps you to 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 faces Congress next week for the central bank’s twice-yearly Monetary Policy Report to the Senate and the House of Representatives.

Will Mr Bernanke offer any clues that the launch of QE3 is imminent? This from the FT’s US economics editor Robin Harding: Read more

Claire Jones

Why it was needed

Lending has slumped and, what borrowing there is, has become more expensive. See charts below.

Funding for lending aims to make credit more plentiful and cheaper to obtain.  Read more

Claire Jones

Funds parked at the European Central Bank’s deposit facility have fallen by more than half in the past 24 hours. That is no surprise: on Wednesday the governing council’s decision, made last week, to pay nothing on deposits held at the facility took effect. It was probably more surprising that any bank bothered to use the facility at all.

The slump in deposits tells us nothing about whether the latest round of rate cuts have had the desired effect in boosting lending to households, businesses and governments in the eurozone. Read more

Robin Harding

There’s lots to learn from the June 2012 FOMC minutes although all the attention, as you’d expect, is on parsing the chances of QE3. I’ll do a bit of that below but here are some other points of interest:

I read the minutes as showing a fairly high chance of QE3 if the economy remains weak. Some evidence for that view: Read more

Claire Jones

The People’s Bank of China has not cut rates twice in a month solely because the domestic economy is showing signs of slowing down.

Officials in Beijing, and elsewhere in Asia, are easing monetary policy in part because they are intent on getting ahead of the curve should things get much worse in the eurozone and global trade collapse in the way in did in the months following Lehman Brothers’ failure.

Two fascinating speeches made in recent days by Federal Reserve and Bank of Japan staff highlight just how grave central bankers believe the threat from Europe actually is. Read more

Claire Jones

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

Libor scandal: Tucker hearing

Deputy governor Paul Tucker appears before the Treasury Select Committee on Monday afternoon to give his take on the Bob Diamond phone call. The session is due to begin at 4.30pm UK time (3.30pm GMT). Read more

Claire Jones

Not since Manchester miserablists The Smiths disbanded have there been many records as gloomy as that released by the Bank of England today.

The record of the interim Financial Policy Committee reveals members thought the risks to financial stability so serious that they were willing to consider a suspension of the Financial Services Authority’s world-leading liquidity rules. This from the FT’s chief regulation correspondent Brooke Masters: Read more

Claire Jones

Mario Draghi. Image by Getty.

Mario Draghi. Image by Getty.

Hello and welcome to today’s live blog on the ECB press conference. 

The governing council has just cut its main rate below 1 per cent for the first time in the ECB’s history. It has also cut its deposit rate to zero. 

All times are UK time. 

 

14.33 This live blog is now closed.

14.32 The questions end.

14.31 Mr Draghi says negative nominal interest rates — ie, actually charging banks to park funds at the ECB — have not yet been discussed. He doesn’t rule them out though, saying simply that they will not “elaborate” on further action.

The ECB president also dismisses concerns that they are “running low” on policy options. Read more

Claire Jones

The ECB’s governing council has cut its main rate below 1 per cent for the first time in the institution’s history, as expected. The main refinancing rate falls by 25 basis points to 0.75 per cent. The rate on the deposit facility has fallen to zero. The rate on the marginal lending facility has been lowered to 1.5 per cent.

Mario Draghi, ECB president, will take journalists’ questions from 1.30pm UK time. Read more

Claire Jones

The People’s Bank of China has cut interest rates.  This from Bloomberg:

The one-year deposit rate falls to 3 per cent. The one-year lending rate falls to 6 per cent. Read more