RP’s Diary
Let new model banks thrive
….and decently bury the old
In this week’s FT Money (25/26 January) , Merryn Somerset Webb, editor-in-chief, has some interesting remarks on banking. She points out that customers have new, and often better, ways to borrow than “via the traditional fleecing machines with their pricey real estate and unreliable IT systems”. There are new entrants to the market,…
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Eurozone makes progress
The eurozone can make a rules-based monetary system succeed
The eurozone is widely viewed as a failure, held together only for political reasons. This, it is said, has been proved by the financial crisis and the failure to manage the debt problems of governments in southern Europe. At least, that is the dominant view among the Anglo-Saxons; one searches far and…
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German power needs global fetters
Berlin should lead Europe in calling for a better monetary system
One side-effect of the comic opera that is the Hollande presidency of France is to knock it out, at least temporarily, as a serious counterpart to German strength in Europe. That is a coming challenge for the whole international community, not just for the European Community. Germany is always portrayed as the…
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Bernanke’s lost opportunity
Nobody was better placed to do R & D on a better system; more's the pity he blew it
Given that he was at the heart of monetary policy making before, during and after the biggest monetary disaster of all time, Ben Bernanke should be mightily pleased with the reviews he has been getting as he leaves office as Fed chairman. All but a disgruntled minority give him full marks for leading…
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Yellen – hawk, dove or owl?
Janet Yellen appointed Chair of the Federal Reserve
Heard on the Street: “With the economy picking up, Yellen may taper faster than you think. She may turn out to be a hawk in dove’s clothing”. “No way. Janet’s a dove – a dove dressed in dove’s clothing”. “You are both mistaken. She is an owl. But, as Hegel said, the owls…
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How vulnerable is the dollar?
There are parallels with the decline of the pound sterling
There is no point dreaming about a new monetary order when the dollar remains dominant and is here to stay. At least, for all practical purposes. That is the bottom line of most commentaries on proposals to reform the international monetary system, such as that advanced in The Money Trap. Indeed, the…
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Beijing sets out its stall
How China will challenge the western hold on world money
Although the gloss has worn off the market’s initial enthusiastic endorsement of Beijing’s ambitious reform plans unveiled last month, there is little doubt they represent a major further move towards freeing financial markets – and promoting the international role of the RMB. In addition to changes in how companies file for stock market…
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The Meltzer plan for world money
The basis for a new monetary order is already here
Professor Allan Meltzer has for some years advocated a reform of international monetary arrangements based on a joint adoption by large economies or areas of similar inflation targets. This is a summary. The US, the Euro, Japan and China (if it ends its currency controls) should adopt a common 0 to 2 percent…
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The Ikon – towards a new currency unit
How the global monetary standard proposed in
The global monetary unit woud be defined by international treaty. The value of the unit is defined by a basket of diversified global equity shares, represented by an index (see W Engels, 1981). An international currency board would be tasked to hold the value of the monetary unit constant against the basket (index). I…
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A common criticism of proposals for reform of the international monetary system is that they are not politically possible. Of course, there are other grounds on which they can be and are criticised – especially when they call for a return to stable exchange rates, a howl goes up that this would sacrifice the domestic…
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