The Wolfson Prize winner sets out a plan for euro exit July 5, 2012 THE simple fact is that Eurozone policymakers are still not doing enough to deal with the root causes of the crisis. Peripheral economies are fundamentally uncompetitive inside the currency union and will be unable to return to solid economic growth and fiscal health without exiting. Some form of Eurozone break-up remains likely. As we, at [...]
Is the Bank of England right to increase quantitative easing by a further £50bn? July 5, 2012 YES George Buckley The UK’s recovery continues to disappoint. So much so that we are back in recession, with output having contracted since last autumn. Among the G7, only Italy has seen a weaker recovery. With that in mind, the Bank of England needed to act this month, and act it did – its £50bn [...]
RAPID RESPONSES July 5, 2012 Political animals [Re: Pity Osborne isn’t this passionate when talking about growth, yesterday] George Osborne is treating this scandal as a political game, and most of the coalition is following him. There may be evidence of over-close contact between politicians and bankers, but that contact crosses the spectrum – it is, in fact, structural. Jamie [...]
Trust has lost all of its value in our state-regulated financial markets July 4, 2012 THE spotlight in the Libor rate-fixing scandal has moved. Questions are being asked about the culpability of the FSA, which may well have ignored repeated warnings about Libor calculations from market participants. The role of the Bank of England and the Treasury is also being questioned. Of course, regulators are not to blame for the [...]
Obama’s healthcare victory could prove a poisoned chalice in November July 4, 2012 FOLLOWING the ratification of the US Constitution, Benjamin Franklin quipped that “in this world, nothing can be said to be certain, except death and taxes.” Due to the creative jurisprudence of Chief Justice of the Supreme Court John Roberts, President Barack Obama can be thankful that the death of his health care reforms has been [...]
The Higgs boson discovery is only the first chapter July 4, 2012 SCIENTISTS at the European Organisation for Nuclear Research (Cern) announced yesterday that they have identified a new heavy particle with all the properties expected of the Higgs boson – first predicted to exist in the 1960s. This is not the first new particle that experiments at the Large Hadron Collider at Cern have discovered since [...]
As Barclays’ rate-fixing revelations continue to emerge, should this be the end for Libor? July 4, 2012 YES Tim Price There has to be a more honest and efficient way of establishing market interest rates than having banks submit – whether fraudulently or not – where they think they might be able to borrow from or lend to their competitors, and then crudely averaging the results. One answer might be to allow [...]
RAPID RESPONSES July 4, 2012 Systemic failure [Re: Crisis threatens UK’s entire politico-financial establishment, yesterday] This crisis is not essentially about greed or malfeasance by commercial banks, but about the toxic environment created by decades of misconceived policies by governments, and enablors and abettors in central banks. The Barclays’ affair is potentially explosive, so let’s hope the media start asking [...]
The Libor scandal may destroy the preeminence of the City of London July 3, 2012 THE 2007-8 banking crisis was a disaster for London’s international position as a banking centre. But financial services is much more than just banking. It includes areas such as insurance (in which London’s position is strong internationally, though by no means dominant) and securities and broking – in which London had every prospect of remaining [...]
The paradox at the heart of the Bank of England is now clear for all to see July 3, 2012 THERE is a contradiction at the heart of the Bank of England, which may be laid bare today. It is this: the Bank is above the markets and yet intimately involved in them. The twin spheres – Sir Mervyn King’s lofty world of monetary policy and econometrics and his deputy Paul Tucker’s world of market-makers, [...]