The ECB Goes Rogue

Source: The ECB Goes Rogue

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This horrible work “macroprudential”

macroprudFrom @MacroPru tweet and yb video

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Ten ways to tell you might be sitting next to an economist (The Economist on Airline safety)

“AN ACADEMIC economist was taken off a plane last week after a fellow passenger became suspicious. He was feverishly scribbling what she thought was “terrorist code” or foreign lettering into a notebook. It turned out that Guido Menzio, an Italian economist from the the University of Pennsylvania, was working on some differential equations for a model on menu costs and price dispersion. Thankfully, Mr Menzio was allowed back on his flight.”
More read here:

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Central banks – the new normal

Central banking and monetary policy – which will be the new normal? is a one day conference co-organized by SUERF/BAFFI Carefin. Right on time BIS has published research discussing negativity of negative interest rates.

Financial Times discusses the matter with invited guests in their video blogg



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The challenges of central bank divergence

“The US is years ahead of the EU in recovery and so at a different stage of the monetary policy cycle”- writes Financial Times

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Charles Wyplosz on ECB communication

ECB minutes: What they really tell us
“The ECB has finally begun releasing the minutes of its policymaking meetings, something the world’s major central banks have been doing since the 1990s. This column asks whether the publication of these minutes increases ECB transparency. While providing useful information on analysis at the ECB, the minutes lack the details on the actual discussions and the voting behaviour of committee members that the minutes of the Fed, the Bank of England and the Bank of Japan provide. They thus constitute just the first step, albeit a very welcome one, towards ECB transparency.”

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Big Bad Wolf of Financial markets – financial innovations

The more I read about financial market and reasons of the current crisis – the more amazed I am and the more I like this job. Such an entertainment!

Currently I read a CEPR report from 2009 about market regulation and so on, and I start admiring bankers even more. On the page 2 of the report we read: “While it was thought
that these [financial] innovations were beneficial because they transferred banking risk to nonbanking institutions, we have to acknowledge now that in practice they imported systemic risk from non-banking institutions and securities markets to the heart of the
banking system.”

Financial regulators looked at this process with a passive attitude and content that the risk is moved out from the banking sector. At the same time, credit agencies decided about the future of many companies grading their condition while being not entirely neutral and objective.

And further I learn about factors , p. 91: “underlying amplification mechanisms
that turned several hundred billion dollars of losses in the subprime mortgage
market into a multi-trillion dollar destruction of wealth.”

Even though I’ve read about this so many times and heard about this even more often, it’s really exciting to read further.

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