IMF

Davos Day 3

January 25, 2013 9:02 am by Ben Fenton

(AP)

Friday’s events from the World Economic Forum feature an address by Mario Draghi, president of the European Central Bank, and sessions looking at the challenges faced by, and presented by, the fast-changing Arab world. Reports from FT writers in Davos and by Ben Fenton, Lina Saigol and Lindsay Whipp in London

17.03: The Davos Live Blog is closing down now but for more reading and insight on today’s events, please visit the FT’s in depth page on the World Economic Forum.

16.41: Gideon Rachman, titular proprietor of this blog, has written his surmise from the earlier session on Syria.

16.16: Asked by the Amercian moderator of his panel session about corruption and banking regulation, Nigeria’s central bank governor Sanusi displays a little frustration:

He said: “We are the only country which has taken people out of banks and put them in jail. No bankers in your countries have gone to jail.”

16.12: Martin Wolf has recorded his view on the politics and economics at play in a “low-intensity” Davos this year:

 Read more

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Posted in Davos, Development, Financial crisis, Foreign affairs, Islamism, Mali, Middle East, Syria, World affairs |

Alan Beattie The IMF: we were right about being wrong. But normally we aren’t.

January 3, 2013 9:48 pm by Alan Beattie

There was a big kerfuffle in October when the IMF made a point of saying that it (along with a bunch of other forecasters) had underestimated the effect of fiscal tightening on European economic growth over the past couple of years, with obvious implications for the troika’s austerity programmes for the likes of Ireland, Greece and Spain.

The admission got some predictable pushback from troika members who have drunk deep from the austerian well. It was also questioned by my colleague Chris Giles, who pointed out that the results were highly sensitive to the inclusion in the sample of outlier countries – especially Germany (which, despite its frugal prescription for others, has itself followed expansionary fiscal policy and enjoyed good growth) and Greece (the opposite) – and possibly the exclusion of the Baltic states, which followed aggressive fiscal tightening to better effect than Greece. Read more

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Posted in Europe, Financial crisis, Germany, Greece, World affairs |

Alan Beattie Trouble in t’troika

November 13, 2012 8:20 am by Alan Beattie

With friends like these…. Jean-Claude Juncker and Christine Lagarde. (AFP)

It’s not as if the troika of eurozone rescue lenders never falls out, but usually it takes a not-in-front-of-the-children attitude to airing its rows. A refreshing change on Monday night, as my colleagues Peter Spiegel and Josh Chaffin report, when the eurogroup summit, while not actually deciding anything substantive, made sure it would stand out from the dozens of other such gatherings by hosting a very public argument between the eurogroup’s Jean-Claude “We all know what to do, we just don’t know how to get re-elected after we’ve done it” Juncker and the IMF’s Christine Lagarde.

The actual substance of the spat looks laughably trivial. It’s about whether Greece hits its 120 per cent of GDP debt target in 2020 or in 2022, which, given the huge uncertainties in forecasting debt dynamics, is about as precise as a Florida election count. The 120 per cent target is itself pretty arbitrary, apparently based on what seems to be sustainable in Italy, which is a very different country with a more flexible economy and captive domestic investor base for government bonds. Read more

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Posted in Europe, Financial crisis, Foreign affairs, Greece |

Alan Beattie China’s IMF no-show

October 10, 2012 5:03 pm by Alan Beattie
IMF headquarters in Washington. Saul Loeb/AFP/Getty Images

Saul Loeb/AFP/Getty Images

Yesterday, I was all “the emerging markets have a point about running the IMF”. Read more

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Posted in China, Global economy |

Alan Beattie Who gets to run the world: a technical note

October 9, 2012 6:22 pm by Alan Beattie

Giving emerging markets their rightful place in running the world economy has now been a staple summit platitude for years. Getting everyone to agree how to calibrate hegemony is a bit trickier.

The IMF is struggling with this at the moment, as its shareholder countries remain a long way apart on revising the “quota“, or voting share, given to each nation on the fund’s executive board. (For a sense of the complexity and intractability, think the Schleswig-Holstein Question but with Excel spreadsheets.) Read more

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Posted in Foreign affairs |

Smart Reads September 25, 2012

September 25, 2012 2:57 pm by Amie Tsang

Here are today’s reading nuggets for you: Read more

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Posted in Smart Reads |

Alan Beattie The IMF in Europe and its discontents

July 20, 2012 9:03 pm by Alan Beattie

No word left minced in this fairly fierce resignation letter (obtained by CNN) sent by Peter Doyle, who is quitting the European department of the IMF after 20 years at the Fund, attacking particularly its role in the eurozone crisis.

The money quotes:

After twenty years of service, I am ashamed to have had any association with the Fund at all…

This is not solely because of the incompetence that was partly chronicled by the OIA [Office of Internal Audit and Inspection, though he may be referring to this document by a different watchdog body] report into the global crisis and the TSR [Triennial Surveillance Review] report on surveillance ahead of the Euro Area crisis. More so, it is because the substantive difficulties in these crises, as with others, were identified well in advance but were suppressed here…

Further, the proximate factors which produced these failings of IMF surveillance – analytical risk aversion, bilateral priority, and European bias  - are, if anything, becoming more deeply entrenched, notwithstanding  initiatives which purport to address them.

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Posted in Europe, Foreign affairs |

Neil Buckley Myths and truths of the Baltic austerity model

June 28, 2012 12:16 pm by Neil Buckley
Hillary Clinton and Latvian foreign minister Edgars Rinkevics on June 28 (Ilmars Znotins/AFP/GettyImages)

Hillary Clinton and Latvian foreign minister Edgars Rinkevics on June 28 (Ilmars Znotins / AFP/ GettyImages)

Visiting Latvia on Thursday, Hillary Clinton praised the Baltic state for taking “very difficult” austerity measures that would ensure a “stable, prosperous future”.

The US secretary of state is not the only high-profile figure praising Latvia’s economic record.

Christine Lagarde, the IMF managing director, dropped in this month and proclaimed its austerity programme an “inspiration” for heavily-indebted eurozone countries.

Latvia and its Baltic neighbours Estonia and Lithuania suffered the world’s steepest economic contractions in 2009 amid swingeing austerity measures. But now they find themselves in the frontline of the debate over austerity versus growth as the best way to tackle the eurozone’s debt problems. Read more

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Posted in Eastern Europe, Europe |

Alan Beattie Buy on the summit, sell on the communiqué

June 11, 2012 6:03 pm by Alan Beattie
10-year Spanish bonds over past month - Bloomberg

Yields on Spanish 10-year bonds over the past month – Bloomberg

The market reaction to the Spanish bailout continues to validate the infallible eurocrisis trading rule of “buy on the summit, sell on the communiqué”. Why so negative, especially for Spanish sovereign debt?

As has been extensively pointed out, the Spanish rescue is a roundabout way to do a bank recapitalisation. Instead of taking direct equity stakes in the banks, the EFSF/ESM has had to lend via FROB, Spain’s bank rescue fund, thus increasing Spain’s sovereign debt load and raising all sorts of tortuously tricky questions about seniority.

So why do it this way? It’s the old story of policy architecture not reflecting the realities of the world economy. Read more

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Posted in Europe |

Alan Beattie The Fund in Spain?

June 6, 2012 4:35 pm by Alan Beattie

Could the IMF help bail out Spain? Tricky one. As goes the EU, so goes the IMF, only more so. Read more

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Posted in Global economy, Spain |
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