Tag Archives: Christine Lagarde
‘The Money Trap’ now
The book argued that the crisis was the joint product of inflation targeting, irresponsible banking and a weak international monetary system. The book tried to show how these were inter-related: First, inflation targeting, which had been a valuable tool in combatting 1970s inflation, had by the 2000s outlived its usefulness as a guide and discipline for…
» Continue Reading
G20 fails to act
People know we haven’t cracked the problem. Anaemic, faltering growth has brought a sense of greater security and well-being only to those in work or those with assets like shares and city property that have floated up on the rising tide of central bank liquidity. Since 2007 vast disparities of wealth have become even…
» Continue Reading
When international monetary reform will be politically attractive
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…
» Continue Reading
Might the US champion reform?
A few years ago, there was much excitement amongst monetary reformers when the governor of the People’s Bank of China made a speech championing reform. But China did not follow up that initiative – indeed, officials downplayed it, saying that Governor Zhou had been speaking in a personal capacity. Then came President Nikolas Sarkozy, who…
» Continue Reading
Christine Lagarde gets it wrong
“The financial system can work if each of its members follow the right principles for their economy” M Lagarde has had a successful year at the Fund but this statement at the G20 meeting in Moscow yesterday shows the Fund has not learnt the key lesson of the economic disaster. The mistaken…
» Continue Reading
It’s the system, stupid!
One very senior former policy-maker has written to express his broad agreement with the analysis in The Money Trap. He cites three sentences on page 33, which sum up my review of the performance of the world economy since the collapse of Bretton Woods in the early 1970s: “The severity of the financial crisis…
» Continue Reading
Why gold is back
In investment terms, we face a scenario that says neither bonds nor equities are likely to rise. The ‘uncertainty’ is greater than ever. And it is ‘uncertainty’ that drives people into gold, not relative values in paper currencies. We have to think that gold is the central thing around which everything else moves….
» Continue Reading
Central banks remain stuck in the trap
Mervyn King has mounted a defence of inflation targeting. Monetary policy, he claims, is part of the solution to the crisis, not part of the problem. This view was echoed by many official spokesmen at the recent IMF meeting in Tokyo. Christine Lagarde praised the central banks. There are quite minor…
» Continue Reading
Banks that go bust
One of the lessons of FinCR (financial crisis and recession) is clear. We have to get better at stress-testing. That is, we have to understand better than we did what circumstances can push banks over the edge into insolvency, and how regulators can spot weak banks in advance. Or so the story goes. The…
» Continue Reading
Volcker, Lagarde, Rees-Mogg and the Ikon
Lord Rees-Mogg, former editor of The Times, London and doyen of British commentators, has called for a reform of the global financial system (GFS). Rees-Mogg quotes Paul Volcker, who in a recent interview described the present period as one of the most difficult in history: “This is a recession on top of a complete financial…
» Continue Reading