Opinion/Reserves
Dilemma facing Southeast Asia's central banks
This article published on Thursday 21 April looks at the situation of Asian central banks. A cocktail of rising inflation, slower economic growth and "an aggressive" Federal Reserve is forcing local central banks to raise interest rates when their…
History explains Indian comfort with reserve surge
This article says the trauma of the 1991 crisis, triggered by the drying up of capital flows and withdrawals by non-resident Indians, goes along way to explain why India is comfortable increasing its stockpile of reserves. "There's no faith in the…
Are Korea's rising foreign reserves bane or boon?
Korea's massive foreign reserves have sparked debate on the optimum level of reserves and the management of the currency supply. But according to this article, 'Are rising foreign reserves bane or boon?', the key question is not what level the central…
How foreign reserves could make China yet stronger
This article says China's burgeoning foreign exchange reserves could provide an ideal remedy if the country's financial system is too fragile to sustain high growth levels in the long term. Up to $500 billion could be put into a social reconstruction…
Asian central banks' dilemma
Diversification away from dollar denominated foreign exchange reserves is a natural reaction for Asian central banks, this article says. But because of the size of their holdings, any sudden move to sell a substantial part of these holdings could cause a…
Asian central bankers affecting markets
The dollar's nearlythree-year decline has led many central banks to consider diversifying into other types of money, especially in the face of a more valuable euro. According to this article, the reaction to recent comments from South Korea serves as a…
Should the euro be the reserve currency?
In this article published on Sunday 27 February, Roger Bootle says that although South Korea denied speculation it is considering switching some of its reserves out of dollars and into euros, it would be startling if South Korea, and other countries,…
Foreign reserves, Asia's problem of plenty
The dilemma facing many of emerging Asia's economies over how best to use their massive stock of dollar reserves is hardly new, this article says, but some economists suggest spending central bank reserves on domestic projects, rather than leaving them…
IMF gold sales - Why it will be a non-event
This article considers the idea of the IMF selling off some of its gold reserves and using it to give poor nations debt relief. It says the IMF should instead return the gold to member nations or at least use the gold as a reserve asset as it was meant…
The lobster trap of central banking
According to an article published this week, central banking is a gigantic lobster trap. It is set by the commercial banking industry and the government, which grants the central bank a monopoly over the control of the monetary reserves (government debt)…
The fight over Venezuela's central bank profits
Last weekend Venezuela's President Chavez once again attacked the central bank over the amount of "foreign exchange profits" it should turn over to the government. With Chavez threatening to go to the Supreme Court on the issue, this article suggests the…
Korea's possible central bank deficit
The Bank of Korea is highly likely to register a deficit this year for the first time in a decade, according to this article. The Ministry of Finance should refrain from meddling too much in the market and let the central bank do its job of stabilising…
Japan ponders reserves switch
Japanese Finance Minister Sadakazu Tanigaki's suggestion that Japan might consider diversifying its massive foreign exchange reserves provoked speculation about possible dollar dumping on a huge scale by Asian governments and also set the gold market…
Venezuela's central bank under pressure
This article looks at the position of the central bank of Venezuela (BCV) following calls from President Hugo Chavez to hand over $1 billion from its reserves. Chavez has called it 'absurd' and 'crazy' for the reserves just to sit in the bank, and…
Are Asian central banks easing up on derivatives?
An article, first published by Reuters, looks at the relaxation of restrictions on credit derivatives in Asian markets by central banks. Although these countries have traditionally blocked such instruments for fear of harming their exchange rates looser…
Interview - President of Central Bank of Ecuador
INTERVIEW - In a recent interview Mauricio Yepez, president of Ecuador's central bank, spoke of the technical missions to Ecuador by the IMF and other institutions. He said Ecuador expects to get 100m US dollars from the IADB later this year and a first…
Importance of risk management stressed
ARTICLE - The risk management in Islamic banking is vital in the rapidly growing segment of the global economic industry, Mahnaz Bahrami, the senior economist for research and policy at the Central Bank of Iran, has said.
China's first gold exchange opens for trade
ARTICLE - The opening of China's first gold exchange on Wednesday in Shanghai signals the end of 50-plus years of government monopoly over the gold market.
Complexity will not cut banks' risk
LETTER - Letter published in the Financial Times, UK edition, 21 October.
Developing nation bankruptcy treaty may emerge
ARTICLE - With financial instability rippling through Latin America, momentum appears to be building for an international plan to make it easier for developing nations to declare bankruptcy and renegotiate their foreign debts, reports the Wall Street…
Don't blame Brazil
ARTICLE - In an article in the Financial Times on Tuesday, George Soros suggests that the market's reaction to the IMF's $30bn rescue package in Brazil shows that a new approach is needed.
No middle ground on operational risk debate
ARTICLE - While regulators insist they are well on their way down the road to new international capital standards, bankers say they are following the wrong map to destinations unknown. From American Banker, 12 August.
Argentine rescue
FEATURE - Next week, four wise men are off to Buenos Aires. Their mission is to help Argentina's government and the International Monetary Fund to reach agreement on a programme of economic recovery. If they are to succeed, they must inject a sense of…
Soros says central banks should bailout Brazil
ARTICLE - In the wake of the current economic crisis in Brazil, George Soros has said that leading central banks should open their discount windows and refinance the holders of Brazilian debt. Indeed, he expressed surprise that central banks had not…