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Tag Archives: money & banking

A War No One Can Win – Ukraine and the Weaponisation of Everything

This article first appeared in the Indian journal Economic and Political Weekly on 19 March 2022. Russian Invasion of Ukraine The Russian invasion of Ukraine started on 24 February 2022. Since then, several thousand combatants from both sides and more than 500 Ukrainian civilians have died, bombs have ruined many cities, and more than two million Ukrainians, half of them children, left the country to become refugees. And the sweeping sanctions the West imposed on Russia in response not only...

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Quantitative Easing: how the world got hooked on magicked-up money

Going cold turkey would finish off a dysfunctional global financial system that’s now hopelessly addicted to emergency infusions. The only solution is surgery on the system itself. This article first appeared in Prospect magazine on 16 July 2021. The world economy is a mess. The system, notionally governed by the invisible hand of the market, is no longer governed in any meaningful way: private excess puffs up bubbles that government indulgence ensures can never burst. We seem condemned to...

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The case for an Ecological Interest Rate

Between the Anglo-American political horror shows of 2020 and the raging pandemic, something much less theatrical drifted centre stage to play a more than usually important role: interest rates. There is one obvious reason: like waiting to witness a rare celestial event there is a high likelihood that rates will do a shocking, unusual thing and go negative. But there is another important reason that hasn’t, to date, been part of mainstream economic commentary. With more focus than ever on a...

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Ways & means of paying Government’s growing bills – financing or cashflow?

“The Bank has always held itself bound to the extent of its power to render the assistance required by the Treasury in any exigency and under any condition of the Money Market.” – James Currie, Governor of Bank of England, July 1885 to Lord Salisbury, Prime MinisterThe new agreement between Government and Bank of England to make the Government’s overdraft with the Bank (the Ways and Means Facility) open-ended has been characterised as direct “monetary financing” of...

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Warren Mosler and the Great American Banking Myth — George Selgin

Although I've taken issue with various MMT claims in the past (see, e.g. here and here), I've grown to respect several Modern Monetary Theorists. Far from being ill-informed, people like Eric Tymoigne and Nathan Tankus (the list is by no means exhaustive–these happen to be two whose work I know best) know a lot more than many orthodox economists do about the workings of the U.S. monetary system. Knowing this, I'm not inclined to accuse Modern Monetary Theorists of being ignorant just...

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McKinsey on transforming banking

Corporate banks have delivered steady returns but face daunting challenges. To succeed in the coming years, they need to find another gear. McKinsey InsightsBuilding the corporate bank of the future The digital transformation of any enterprise is a herculean task requiring a willingness to embrace cultural change, the ability to immerse the entire organization in the customer journey, and a total commitment to digitize to the core. DBS Bank Chief Information Officer David Gledhill shares...

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Eric Tymoigne — Money and Banking Post 21: The Interest Rate

In Post 20, a lot is said about the role that the rate of return on financial instruments—the interest rate—plays on the pricing on securities, but little was said about what determines that rate of return. Two competing theoretical frameworks explain what influences the interest rate, one of them emphasizes the role of real factors and the other emphasizes monetary factors. New Economic PerspectivesMoney and Banking Post 21: The Interest RateEric Tymoigne | Associate Professor of Economics...

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