Opinion/Monetary Policy

The Bank is losing a house price game

ARTICLE - This article suggests that the Bank of England's interest rate strategy has gone wrong causing a house price bubble and that central bankers avoid discussion on asset price bubbles incase their collapse makes them look stupid.

Cutting kronas in Sweden

ARTICLE - As we reported earlier in the week Swedish prime minister Goran Persson is set to name the date for the euro referendum next week. The proposed referendum on Sweden's entry to the euro looks like taking place in Autumn 2003. However on current…

Redefine the Bank of Canada

ARTICLE - An extract from former governor of the Bank of Canada John Crow's new book 'Making Money' has Crow on monetary policy. He says it's time for the federal government to clarify responsibility.

CentralBankNet Monday Special Feature

SPECIAL FEATURE - Mervyn King caused a stir last week saying "I have no wish to go into the pulpit" and lecture people about house prices. But with UK property values at dangerously high levels and the catastrophic consequences for the UK economy if, in…

Britain held back by isolation from euro

LETTER - Letter published in the Financial Times, 18 November by Simon Buckby, Campaign Director, Britain in Europe. He says Britain's label of the 'reluctant European' has cost it dear and membership of the euro will be the first step in repairing the…

Spotting the next asset price bubble

ARTICLE - A thoughtful article in last Friday's FT by John Calverly of American Express Bank suggests that an asset valuation committee should be set up to warn of potential asset price bubbles. Though Calverly was directing his remarks to the UK, it is…

Deflation may be the real danger for central banks

ARTICLE - Deflation or inflation - could the central bank guns be facing in the wrong direction? This article suggests that rather than worry about inflation, the major central banks could instead be preparing for a battle against the opposite, deflation.

Diverse bunch

ARTICLE - Another inflation report, another smooth performance from Mervyn King, the Bank of England's monetary policy supremo. Despite the best efforts of his interrogators, he refused to let the words "boom" or "bubble" pass his lips when talking about…

Greenspan's fight

ARTICLE - Last week, the Federal Reserve decided to blow, once again, into the flapping sails of the US economy. The puncturing of the bubble economy continues to create fierce headwinds. Further interest rate cuts - perhaps more unorthodox measures -…

Britain would be mad to join the euro

ARTICLE - Britain's European policies rest on two misapprehensions. Taken together, they lead us into all kinds of danger, yet still we do not abandon them. Perhaps the parlous state of Europe may open even our apologetic eyes and change the way we…

European Central Bank Working Paper No 192

RESEARCH - ECB Working Paper, "Is the European Central Bank (and the United States Federal Reserve) predictable?", by Gabriel Perez-Quiros and Jorge Sicilia, November 2002. This paper examines the predictability of the monetary policy decisions of the…

Bienvenidos Sr Greenspan

ARTICLE - Ever so briefly yesterday, the capital of the world financial system moved to Mexico City. Alan Greenspan, Andrew Crockett, Wim Duisenberg and a bevy of other central bankers were all in town for a seminar on macroeconomic stability organised…

A new policy divide across the Atlantic

ARTICLE - Their analysis was so similar: the US Federal Reserve said on Tuesday that "inflation and inflationary expectations remain well contained"; Wim Duisenberg, the European Central Bank's president, concurred yesterday when he talked about "reduced…

CentralBankNet Monday Special Feature

SPECIAL FEATURE - The Federal Reserve boldly sliced half a point off interest rates last week but the Bank of England and ECB held firm. In this weeks Special Feature CentralBankNet looks at how the markets reacted to the decisions and whether the…

ECB chiefs wife stirs Middle east passions

ARTICLE - When Gretta Duisenberg hung a Palestinian flag from her balcony, her neighbour wrote her a polite complaint. When she agreed to head an organization called "Stop the Occupation," the criticism grew louder.

A government move to clean up loans backfires

ARTICLE - China's four asset-management companies are supposed to be the cutting edge of the government's strategy to clean up the banking system. They may, in fact, end up doing more harm than good--by posing a threat to the health of the body that…

Central bankers do it their way

ARTICLE - It is as well that central bank actions are not co-ordinated. The US Federal Reserve has a clear bias towards stimulus and preventive action, as its half-point cut in interest rates this week shows.

Duisenberg should stop suffocating Europe

ARTICLE - In the autumn of 1998, amid the storm of the Asian crisis, Europe's central bankers referred to Europe as an "island of stability". They were roundly criticised by their US friends who felt that the world economy was enduring its worst…

Following the Fed

ARTICLE - The Federal Reserve has its foot over the gas pedal. An attempt today to speed up the US economy seems almost certain; rarely does the Fed send signals to the financial markets that it is about to cut interest rates, only to disappoint. Whether…

Dislodging the Fed Fantasy

ARTICLE - One of the absurd ideas that took hold in the late 1990s was that the Federal Reserve, presided over by the almost-infallible Alan Greenspan, had essentially conquered the business cycle.