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T. Sabri Öncü

Articles by T. Sabri Öncü

COVID 19-related debt relief: a consortium proposal to the SDR basket countries

November 28, 2020

By T. Sabri Öncü & Ahmet ÖncüIn Memory of David Graeber (1961–2020)This article first appeared in the Indian journal, Economic and Political Weekly, on 21 November, 2020On 30 March 2020, the United Nations Conference on Trade and Development (UNCTAD) called for a $2.5 trillion COVID-19 crisis package for developing countries.[1] The UNCTAD proposals were: (i) $1 trillion to be made available through the expanded use of the International Monetary Fund (IMF) issued Special Drawing Rights (SDRs); (ii) $1 trillion for debt cancellation; (iii) $500 billion to fund a Marshall Plan for health recovery to be dispersed as grants.Shortly after the UNCTAD

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Debt, wealth and climate: globally coordinated Climate Authorities for green financing

April 23, 2020

By T.Sabri Öncü & Ahmet Öncü This article first appeared in the Indian journal, Economic and Political Weekly on 18 April 2020. The authors’ contact details are at he foot of this article.Abstract Based on the German Currency Reform of 1948 and the “Modern Debt Jubilee” of Steve Keen, a globally coordinated orderly debt deleveraging mechanism is proposed to address the global debt overhang problem. Since the global debt overhang and lack of sufficient climate finance flows are interconnected, Climate Authorities are added to the mechanism. Note: We completed this article two months before the Coronavirus Crisis that started in January 2020. Although we present the article as is, the Climate Authority we propose can be expanded to meet the funding needs of fighting the

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Triggering a Global Financial Crisis: Covid-19 as the Last Straw

March 18, 2020

Photo – Black swans in Regent’s Park, London – by Jeremy Smith

T. Sabri Öncü ([email protected]) is an economist based in İstanbul, Turkey. This article was written on 8 March 2020 and first published in the Indian journal Economic and Political Weekly on 14 March 2020.Whether a black swan or a scapegoat, Covid-19 is an extraordinary event. Declared by the WHO as a pandemic, Covid-19 has given birth to the concept of the economic “sudden stop.” We need extraordinary measures to contain it.Initially referred to as the novel coronavirus 2019, the coronavirus disease (Covid-19) originated late in

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Dealing with the overhang of non-financial private debt

November 19, 2019

Building on the International Monetary Fund (IMF) Global Debt Database (GDD) comprising debts of the public and private non-financial sectors for  190 countries dating back to 1950, Mbaye et al (2018) identify a recurring pattern where households and firms are forced to deleverage in the face of a debt overhang, dampening growth, eliciting the injection of public money to kick-start the economy. They observe that this substitution of public for private debt takes place whether or not the private debt deleveraging concludes with a financial crisis, and deduce that this is not just a crisis story but a more prevalent

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The End of Super Imperialism?

October 1, 2019

T Sabri Öncü ([email protected]) is an economist based in İstanbul, Turkey. This article was first published in the Indian journal the Economic and Political Weekly (EPW) on 28 September 2019.Summary: With intensifying concerns regarding the soundness and stability of the international monetary and financial system, calls for reforming it have been on the rise. One recent call was made by the Bank of England Governor Mark Carney, in August 2019, in which he suggested a synthetic hegemonic currency to replace the US dollar as the key reserve currency. Whether such calls will lead to an end of the key reserve currency status of the dollar remains to be seen.  Oldrich Vasicek is an old friend. When I started my “quant” career in bonds in January 1994 in Walnut Creek,

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Thus Spoke the Bond Market

June 20, 2019

T Sabri Öncü (sabri.oncu[email protected], @tsoncu) is an economist based in İstanbul, Turkey. This article was sent on 7 June 2019 and published first on 15 June 2019 in the Indian journal Economic and Political Weekly.  Summary: Would market volatility amidst global trade tensions and uncertainty cause a global recession? Although the world’s major central banks had managed to avoid risks in the first week of June, despite some small variations at some maturities, the United States yield curve remained more or less as it was at the beginning. What will happen in the not-so-distant future?  The titles of a few recent articles

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Are We Heading towards a Synchronised Global Slowdown?

February 13, 2019

This article first appeared in the Indian journal Economic and Political Weekly on February 9, 2019.Abstract: The global economy is heading towards a downturn. However, is the world prepared to deal with the consequences? Whether it is a slowdown or recession, it remains to be seen as to what the future would hold for the banking systems of Eurozone and China, and the global stocks in general.When the International Monetary Fund (IMF) issued its World Economic Outlook Update in January 2018, the future looked bright. Indeed, even the title of the update was very optimistic: Brighter Prospects, Optimistic Markets, Challenges

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A private debt story: Republic of Turkey (un-)hires McKinsey

October 16, 2018

From earlier private debt crisis 10 years ago – President Bush welcomes then Prime Minister Erdogan of Turkey to the G20 Summit on Financial Markets and the World Economy, Nov. 15 2008, Washington D.C. White House photo by Chris Greenberg.

This article first appeared in the Indian Journal the Economic & Political Weekly on 12 October 2018 About four years ago, I penned an article in the Economic and Political Weekly titled, “A Sovereign Debt Story: Republic of Argentina vs NML Capital” (EPW, 17 May 2014 ). Many things have happened since then and it is time to write a private debt story now,

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Did This Straw Break the Finance Sector’s Back? 

July 4, 2018

Image with acknowledgment to

Abstract: The world’s financial markets are hurtling towards a new phase of crises ranging from currency to balance of payments  to sovereign debt to banking crises. The monetary tightening policies of the United States Federal Reserve and the European Central Bank will only precipitate crises in emerging market as well as peripheral eurozone economies, which will have global repercussions.Prologue: the story so far…I will define the ‘straw’, and start with quoting from my July 2017 H T Parekh Finance

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Debts That Cannot Be Paid Will Not Be

July 20, 2017

Photo, International Finance Place, Guangzhou, China, by Jeremy Smith

Total global debt has increased, growth has been slowing down since the onset of the global financial crisis in 2007 and has been rapidly decelerating after 2012. This may be a sign that the world has arrived at its debt carrying capacity or has even crossed it, meaning that capitalism is probably already insolvent.With my June 2015 HT Parekh Finance Column article titled “When Will the Next Financial Crisis Start?” (Öncü 2015a) I initiated an investigation of the possibility of a new phase in the ongoing global financial crisis

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