mervyn king

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If a close confidant had asked Sir Mervyn King, governor of the Bank of England, a year ago which City institutions he would like to take down a peg or two, the answer might well have been: Goldman Sachs and Barclays.

It has happened more by accident and opportunism than by express design, but during the past six months, the governor has duly hit those banks where it hurts. Read more

close up of the Bank of England sign©EPA

At ease: the BoE has put £375bn into the UK economy

Two questions arise when the lacklustre performance of the UK economy is discussed: what more should be done? And what more can be done?

Sir Mervyn King, governor of the Bank of England, gave pretty clear answers to both in a speech on Tuesday nightRead 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

The Federal Open Market Committee meets on Tuesday to set monetary policy for the coming month and a half. The committee votes on Wednesday afternoon. Here’s the FT’s US economics editor Robin Harding on what to expect: Read more

Michael Steen

According to the Maradona theory of monetary policy, as outlined by Sir Mervyn King, governor of the Bank of England, a central bank can let expectations that it will act – rather than actual action – do the work for it.

The theory is being tested right now by Mario Draghi, president of the European Central Bank, as his controversial “outright monetary transactions” bond-buying programme is forced to sit on the benches until the prime candidate for help, Spain, applies to the EU’s bailout fund.

As a quick reminder, the Maradona theory refers to the 1986 World Cup quarter final between England and Argentina. Diego Maradona scored a celebrated goal with a run from near the halfway line in which he beat five England players by, er, running in a straight line. Read more

Chris Giles

For almost the entire time the Bank of England has enjoyed operational control of monetary policy, the redistributive effects of monetary policy have rarely hit the headlines.

The public appeared to accept that interest rate rises hit borrowers and benefited savers and vice versa. The vast majority of the commentary related to the analysis of whether any monetary policy change was warranted by the prospects for inflation. This, in Britain at least, was the way the Bank of England liked it.

Unelected officials feel very uncomfortable about being seen to favour one group of society over another. Redistribution, after all, is properly something for elected politicians, since it involves using the power of the state to take money from some to give it to others.

It is noteworthy, therefore, both that the distributional effects of quantitative easing are now being raised vocally by strong lobby groups and that the Bank is feeling peeved, rightly so.  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

ECB’s big bazooka

Next week’s main event is, of course, the European Central Bank’s second offer of cheap three-year loans.

Attention is fixed on whether the take-up will be greater or less than in December, when the central bank loaned €489bn. 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

FOMC meeting

The Federal Open Market Committee meets on Tuesday and Wednesday to set monetary policy for the coming month and a half.

The meeting – to be followed by one of chairman Ben Bernanke’s press conferences – could see the FOMC announce an inflation target. This from the FT’s US economics editor Robin Harding: Read more

Claire Jones

Hello and welcome to today’s live blog on the Treasury Select Committee’s hearing for the Bank of England’s Financial Stability Report.

The governor will be giving evidence, as will executive director for financial stability Andy Haldane, and external Financial Policy Committee members Michael Cohrs and Robert Jenkins.

This post should update automatically every few minutes, although it may take longer on a mobile device. All times are London time.

13.18 The live blog is now closed.

13.17 Here are the key takeaways from today’s hearing:

  • The Bank is clearly nonplussed with the Treasury Committee’s call for a strong supervisory board. Sir Mervyn

 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

Volcker rule

Daniel Tarullo, the governor tasked with the regulation brief at the Federal Reserve Board, will answer questions on the Volcker rule following criticisms by the Japanese and Canadian authorities this week. Read more

Claire Jones

Controversy over Philipp Hildebrand continues to rage. This from the FT’s Haig Simonian:

The Swiss National Bank will pay its former chairman a full year’s salary of about SFr900,000 ($942,000), in spite of his stepping down voluntarily in only the second week of the year.

The bank said Philipp Hildebrand’s contract entitled him to 12 months’ pay. The first six months covered his notice period, with the remainder compensating him for a clause in his contract that prevents him from working for another bank until next January.

The pay-off will stoke a political storm in Switzerland over Mr Hildebrand’s departure following revelations of currency transactions by his wife, and is likely to fuel the wider debate in Europe over bankers’ remuneration.

At Sfr900,000, Mr Hildebrand’s salary is high for the head of a central bank. The terms of his severance package are also generous.  Read more