Tag Archives: money & banking

“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...

Repo.Credit SuisseGlobal Money Notes #26 Countdown to QE4? Zoltan Pozsar

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...

The BoE’s decision to raise the Bank Rate to 0.75% is a mistake. It is a mistake comparable to those made by Alan Greenspan’s Federal Reserve in the years between 2003 and 2006.  Mark Carney It is a mistake that must be understood in a wider context. Not just the political context – which promotes...

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...

Yesterday I spoke to a group of important economists about my book The Production of Money - but omitted to make one important point. So am making it here. Savings are not needed for investment. Ever. There is absolutely no need for example, for the Chancellor to rattle the tax collection box, or cut government spending - to...

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...

On 9 August, 2017, PRIME held an event at the TUC to mark the date ten years ago when inter-bank lending froze, and the global financial system began to unravel. We invited Andrew Simms of the New Weather Institute, Frances Coppola and Prof. Daniela Gabor to take stock and assess the state of both the financial and eco systems ten years after the first signs of economic failure. The event was chaired by PRIME’s director, Ann Pettifor.Prof. Gabor began by quoting a Reuters...

PRIME (working with the New Weather Institute) organised an event at the TUC to commemorate the day - 9th August, 2007 - that inter-bank lending froze, central banks came to the rescue of private financial institutions, and the Global Financial Crisis began in earnest. We will be publishing transcripts and notes from that event, which was chaired by...

The dominant view of banks and other financial institutions is that they function primarily as intermediaries, managing flows of scarce funds from those who have accumulated them to those who have need of them and can pay for their use. This understanding pervades textbooks, scholarly writings, and policy discussions – yet it is fundamentally false as a description of how a modern financial system works. Finance today is no more primarily “intermediated” than it is pre-accumulated or...