Monthly Archives: December 2012

Almost a year ago to the day, the European Central Bank averted financial disaster in the eurozone by offering banks an unlimited injection of cheap three-year cash. Hundreds of banks participated in the ECB’s loan programme and by March about €1tn had been pumped into the banking system via two tranches of the ECB’s longer-term refinancing operations.

The LTRO sugar hit was deemed a success, avoiding a liquidity squeeze, temporarily lifting markets and encouraging a flurry of bond issuance in January and February. But as eurozone worries resurfaced, it was Mario Draghi’s pledge in July to do “whatever it takes” to save the euro followed by the ECB’s September offer to buy up the debt of ailing governments via so-called outright monetary transactions that changed the tone of markets.

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Riad Salameh, Lebanon’s central bank governor, talks to the FT’s capital markets correspondent Robin Wigglesworth about how the unrest in Syria has affected the investor and the consumer in Lebanon.

Ingram Pinn

To understand Ben Bernanke, it helps to set aside the ubiquitous pictures of today’s 59-year-old: the controlled beard, the pristine shirts, the worn-down weary look. Instead, search for a snap of the freshly minted graduate who gazes from the pages of the 1975 Harvard yearbook. Unlike the other young men pictured alongside him, Mr Bernanke sports no tie and no blazer. He has a loud checked shirt, long hair and a tremendous, rebellious handlebar moustache.

The moustache may be gone, but the US Federal Reserve chairman remains a rebel – and the world is better off for it. The Financial Times has already crowned its man of the year: Mario Draghi, the European Central Bank president. But my pick for silver medal is Mr Bernanke. The fact that he is sometimes pilloried only underlines his fortitude. Read more

Michael Steen

Yves Mersch. Getty Images

Yves Mersch, the former governor of the bank of Luxembourg, whose elevation to the European Central Bank’s six-person executive board became the subject of a row about the lack of female central bankers, has given his first interview since taking up the post on Monday.

The ECB normally publishes transcripts of these on its website but has not done so this time, presumably because the interview with Germany’s Frankfurter Allgemeine Zeitung was conducted just before he formally took up post. So as a service to Money Supply readers, here are some of the highlights.

Mr Mersch attempted to pour cold water on speculation that a cut to the ECB’s main refinancing rate (currently 0.75 per cent) is imminent. Read more

Is the eurozone set to be the most dynamic economy? Getty Images

Where would you find the soon-to-be most dynamic economy in the western world?

The counterintuitive answer from Mario Draghi, European Central Bank president, is none other than the emotionally battered and low-on-festive-cheer currency bloc whose name has become synonymous with crisis, recession and gloom.

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Mark Carney. Getty Images

Mark Carney, the next governor of the Bank of England, has suggested he will act much more aggressively to revive the UK economy when he takes charge next summer, including dumping the BoE’s much-vaunted inflation target if growth fails to pick up.

In a clear break with the views of the BoE’s current senior management, Mr Carney, now governor of the Bank of Canada, said on Tuesday that central banks should consider more radical measures – such as commitments to keep rates on hold for an extended period of time and numerical targets for unemployment – when rates are near zero. Read more

When the Office for National Statistics relaunched its website last year, a geek like me was distraught as it had failed to make navigation of the UK’s generally wonderful statistics easier. “The new ONS website – aaaargh,” I commented.

Today, I gave evidence on the communication of statistics to the Public Administration Select Committee and to test whether the website had improved materially I thought I would pick a relevant question, to which I wanted to find an answer as a member of the public and as an expert user of the website. The question was: Is unemployment higher or lower now than in 1995?

This is the website journey (for lay and expert users) I described in the Committee, which I think is accurate and depressing. I don’t think a non-expert could find the interesting answer (at the bottom of the post) and an expert has to take a long journey to get there. The result should be immediate on clicking on an unemployment link on the homepage or on typing in the relevant 4-digit code for experts. Again, the ONS website – aaaargh.

Member of the public  Read more

Robin Harding

One topic the Federal Open Market Committee is likely to discuss this week is replacing its forecast of low rates “at least through mid-2015″ with some sort of economic conditions. The idea here is pretty well known by now: rates stay low until unemployment falls below x per cent as long as inflation remains below y per cent.

As I understand the state of play, pretty much everyone on the FOMC prefers this approach to the mid-2015 date, and discussion is well advanced. The challenge is to find a good formulation for x and y that everyone can agree on. My guess is there may be some kind of staff proposal at this FOMC meeting, but more likely one for comment by the committee, rather than one ready to act on.

Choosing x and y is tricky. Here are some thoughts on how the Fed may approach it. Read more

Claire Jones

Mario Draghi, ECB president. Image by Getty.

Mario Draghi, ECB president. Image by Getty.

Hello and welcome to today’s live blog on the European Central Bank’s press conference, which follows today’s governing council vote.

ECB president Mario Draghi will meet the press at half 1.

All times are UK time.


14.30 And that’s it for the final ECB presser of 2012.

The most important developments were the suggestions that a rate cut had been discussed (and that some members of the governing council had supported it at the December vote) and the “growth” downgrades.

14.26 The ECB president says its “pointless” talking about eurobonds now. Why so? Because it would be pointless to talk about mutualising risk before you have put in place rules that limit fiscal discretion. Eurozone members have to rebuild trust first. “It will become realistic when trust is re-established,” he says. Read more

George Osborne chose to ditch straight-talking about the public finances in the Autumn Statement on Wednesday and replace it with fiddling with numbers. I think all of the figures he used in his statement were true — there were no lies — but to coin the motto of accountants, many figures were not fair.

True without always being fair used to be the watchword of Gordon Brown as chancellor, so Ed Balls, shadow chancellor, has little to complain about. Those of us who did complain about Mr Brown’s use of comparisons therefore have a responsibility to be fair and moan about Mr Osborne too. Here are five elements of his speech yesterday which annoyed me because they failed the true and fair test. Read more

Being prepared for big economic statements, such as tomorrow’s Autumn Statement, is a must, given the quantity of information released in such a short time. Even though this will be the 41st Budget, Autumn Statement or pre-Budget report I have covered, I try not to be complacent.

Here’s what I think is important (sorry about the length), what type of analysis is relevant to understanding Britain’s economy and public finances, and at the bottom is a moan about the way in which George Osborne has decided to follow Gordon Brown down the road of playing games with numbers. Read more