Tuesday, 1 April 2014
The March 20, 2014 agreement on the Single Resolution Mechanism (SRM) is a major step toward repairing the euro area’s financial architecture. The SRM is the second pillar of the blueprint for banking union, following agreement on the Single Supervisory Mechanism (SSM), which will take effect when the European Central Bank (ECB) takes over the supervision of systemic banks in November 2014. Both pillars are needed to align banking supervision and resolution at a central level, thus avoiding any tensions between EU-level supervision and national resolution schemes.
Tuesday, 1 April 2014
After more than three decades of sustained economic growth, China has become the second-largest economy in the world. Chinese policies and behaviour have come to shape the global economy in profound ways and what China does, or does not do, at home and abroad often has broad implications for the rest of the world.
Thursday, 27 March 2014
Ok, so, here is the problem worrying some: Behind the encouraging headlines of somewhat stronger growth in the advanced economies, Larry Summers worries that the North Atlantic economy is at risk of secular stagnation; meanwhile, the IMF frets that Europe is flirting with deflation, China is slowing, and the emerging markets are fearful of more “taper tantrums” as the Fed begins to slow the pace of quantitative easing.
CIGI report assesses the viability of the IMF’s creditor status, in light of lessons from the Euro crisis
Wednesday, 26 March 2014
A credible framework for maintaining discipline over International Monetary Fund (IMF) lending is required to ensure the viability of the organization’s preferred creditor status, according to a new CIGI report.
Monday, 24 March 2014
A key tenant of inflation-targeting central bankers (ITCBs) is symmetry. That is to say, policy responses that are symmetric with respect to deviations from their inflation target: inflation above the target elicits tightening; inflation below the target triggers monetary easing. All ITCBs profess fealty to the principle of symmetry. Yet, as the chart below illustrates, with the exceptions of Australia and the U.K., over the past two years inflation in most advanced economies has been persistently below target. Could this performance belie an asymmetry in what ITCBs say and do? Are their policy responses to deviations from the target unbalanced?
Tuesday, 18 March 2014
Martin Wolf has a thoughtful piece in the Financial Times on the prerequisites for democracy. As readers of this blog will know, I have enormous respect for Wolf's work. His latest article was likely motivated by the brinkmanship being played out in Crimea: had there been a more stable democracy established in Ukraine, perhaps, the instability of recent weeks would not have provided President Putin with the pretext for his de facto annexation of the Crimean peninsula.
Tuesday, 18 March 2014
Director of CIGI's Global Economy Program Domenico Lombardi comments on the Bank of England's appointment of IMF official Nemat Shafik, as deputy governor for markets and banking.
Monday, 17 March 2014
Securing central bank independence (CBI) has become best practice in global governance. Both the political and economic literatures suggest that CBI facilitates price stability, promotes transparency to citizens and provides accountability toward the public good. The impact of the Arab uprisings seems to have provided the necessary push for securing CBI in the North African region.
A Failure to Cooperate? Raising the Risks and Challenges of Exiting Unconventional Monetary Policies
Friday, 14 March 2014
In an environment where trade and finance are globalized, it is imperative that stabilization policies do not harm the global economy. When the global financial crisis (GFC) erupted in 2008-2009, China was driving global economic growth and emerging markets helped soften the economic downturn. Now, these economies are slowing down, in part, as a consequence of the largest advanced economies seeking to exit unconventional monetary policies.
Thursday, 13 March 2014
'The challenge is not economic. It's political. Renzi is putting everything at stake in terms of his reputation as a reformist," says Director of CIGI's Global Economy Program Domenico Lombardi, commenting on the task facing Italy's Prime Minister Matteo Renzi.