Tag:

Monetary Policy

Central Banks Stepping up the Fight Against Climate Change

Central banks, guardians of financial systems, consider multiple factors when determining policy; today, as countries suffer the effects of severe weather, central banks feel impelled to include the risks associated with climate change. Groups such as the Network for Greening the Financial System, which unites central banks to address climate-change financial risks and aids the private sector toward achieving a more sustainable future, allow central banks to pool their resources to combat this threat.

July 22, 2019

Finance

For Better or for Worse: The Linkage Between the US Economy and the Major Economies of the Western Hemisphere

The US economy is on track to break its own record; its current 115 months of expansion is only five months shy of the record set in the 1990s. The next recession will come, maybe soon, as the economy succumbs to factors such as policy errors, foreign growth and corporate profit. And the United States will not fall alone; other Western Hemisphere countries will be dragged down with it.

April 8, 2019

Banking

SSA Banks Have Become So Risk-Averse, Thanks to the Actions of Their Governments

In any economy, banks play the critical role of re-allocating capital, from surplus areas into deficit areas. It is a role that sees them take deposits from the public and use the same to issue loans to businesses, both large and small. But that process hasn’t been happening much in Sub-Saharan Africa. Instead, banks, motivated by risk-aversion, have been funneling liquidity into the coffers of governments through government-issued debt securities. SSA banks must get back to the business of lending to the private sector if they are to escalate shareholder returns.

January 21, 2019

Banking

Monetary Policy Dilemma in Latin America and the Caribbean: To Raise or Not to Raise Policy Interest Rates

As economic conditions return to “normal” in the industrial world, policy interest rates will inevitably rise from zero to “normal”—but not necessarily in Latin America and the Caribbean. Central banks in LAC will need to tailor their monetary-policy decisions to tackle the three-pronged challenge of currency depreciation, higher inflation and deceleration in economic activity, as capital flies away from emerging markets.

March 19, 2018

Finance

Low Interest Rates Don’t Mean Easy Money

Quantitative easing and low interest rates were to work together to ignite roaring economic growth following the last financial crisis; in some parts of the world, monetary policy has set interest rates at zero (even below), but growth remains elusive and rock-bottom inflation rates coincide with interest rates. What went wrong?

March 14, 2017

Finance

Interest-Rate Neglect among Millennials Could Bring Monetary-Policy Challenges

The Millennial generation has not carried out personal-financial transactions in what was historically considered a normal interest-rate economic environment. How are near-zero interest rates affecting their financial decisions, and how will their decisions impact the economy and monetary policy of the future?

March 10, 2017

Banking

Monetary Policy: Valentine for Trump

United States President Donald J. Trump received an unexpected valentine last week from Janet Yellen, chair of the Board of Governors of the Federal Reserve System. The higher interest rates President Trump pledged through jawboning the Federal Reserve are coming.

February 20, 2017

Finance

The Great Policy Rotation: Fiscal Is the New Black

Since the global financial crisis, central banks have resorted to monetary policy to pull their economies out of the abyss. But the time may have arrived for fiscal policy to share centre stage as the limitations of monetary policy become more apparent, and national decision-makers turn away from further fiscal-austerity measures toward stimulus.

January 11, 2017

Finance

The Digital-Industrial Revolution: A Path to Growth

Anemic economic growth in advanced economies has led central banks to prescribe loose monetary policy that has not produced the cure. The problem may lie more on the supply than demand side; digital innovation in industrial operations if properly implemented could lead to the transformative revolution that will boost productivity and revive economic performance.

January 4, 2017

Banking

Assessing the Recent Effectiveness of Japan’s Abenomics

Japan boasts the world’s third-largest economy, and yet it has been stalled by deflation, low wage growth and slowing GDP. Prime Minister Shinzo Abe’s three-arrow Abenomics policy, introduced four years ago, was meant to counter years of economic stagnation, but despite some success, it may be time to re-evaluate the plan.

October 20, 2016

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