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Central Banking

Latvia leaves rates unchanged

The Bank of Latvia decided on 13 September to leave key interest rates unchanged, with the refinancing rate remaining at 6%, overnight loans at 7.5% and the overnight deposit rate at 2%.

Overnight UK rates jump

On Monday, overnight sterling lending rates briefly hit levels not seen in over six years,reported Reuters, as the deepening crisis surrounding Northern Rock sparked a scramble among banks for immediate access to cash.

The Maestro defines a bubble

At last we know what a bubble is. Alan Greenspan, who never used the dreaded word while in office to refer to market conditions, always insisted on talking about "froth" in markets.

Fed looks set to lower interest rates

Ben Bernanke, the US Fed chairman, and his central bank colleagues meet on Tuesday to make their next decision on interest rates, and appear set to lower the 5.25% federal funds rate to prevent a housing collapse and credit crunch from forcing the US…

Bank of Korea admits to monetary policy problems

Lee Seong-tae, governor of Bank of Korea, said the central bank has problems in carrying out monetary policy effectively because of cross-border capital transactions that lead to increases in the money supply in spite of rises in key interest rates.

Rates tumble in Venezuela

Overnight lending rates in Venezuela fell sharply last Thursday, after the country's central bank resumed injecting cash into the financial system, a week after it had suspended the practice.

Allan Meltzer dismisses calls for Fed action

The following article by Allan H. Meltzer, university professor of political economy at Carnegie Mellon, and a member of Central Banking's editorial board, was published in the Wall Street Journal on September 15. It provides an incisive analysis of the…

Launch the lifeboats? Not likely!

The closest parallel to the rescue of Northern Rock is the secondary banking crisis which erupted at the end of 1973 and which brought down a whole string of so-called "secondary" banks. That financial crisis, like this one, was preceded by a long period…

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