2019 Global Outlook: Another year near zero
It has been a decade since global interest rates reached the zero lower bound, where monetary policymakers lose their ability to stimulate the economy using conventional policy tools. Among the largest global central banks, only the United States Federal Reserve has set its benchmark above 2 percent. Will this anomaly end in 2019?
Opinion: Cryptocurrencies – fears and opportunities
After a few years of hype, experts are now tamping down expectations for cryptocurrencies. Indeed, several concerns about security and regulation need to be addressed. But cryptocurrencies – and the blockchain technology they are based on – also offer tremendous room for innovation and efficiency. By competing with traditional fiat currency, they could help profligate governments and central banks become more disciplined
In fractured Libya, it’s about oil
As Libya’s civil war sputters on, the country’s principal source of revenue remains its oil fields. The feuding Tripoli and Tobruk governments have allowed the National Oil Corporation to keep managing operations, with the Central Bank of Libya apportioning revenue among the various factions. Now, a power struggle is disrupting the flow of oil and cash as General Khalifa Haftar squares off against Fayez al-Sarraj’s Government of National Accord.
Opinion: A lost opportunity for cryptocurrencies
Cryptocurrencies like Bitcoin are volatile, but could prove useful by injecting a needed element of competition into the realm of monetary policy and finance. Rather than allow this, however, governments will probably step in to regulate them, perhaps under global supervision. If that happens, we will have missed an opportunity to foster new business and job creation in a healthier monetary environment.
Can India bank on its banks?
As the ratio of nonperforming assets in India’s banking sector rises, there have been loud calls for reform. The condition of loan portfolios at state-controlled banks is now so parlous that it is choking off the availability of new credit and forcing the government into ever more ambitious recapitalization schemes. But for all the smoke and noise, substantive change has been elusive.
Janet Yellen considers her last act
Janet Yellen has done what was needed to leave behind fond memories of her term as Fed chief. She waited until the U.S. economy showed vigorous signs of recovery before announcing a soft-landing solution from the excessive liquidity inherited from Ben Bernanke. In part, this was a conscious choice to do what markets expected. But it may have been governed more by a long-term pessimism about the outlook for the economy.
Clueless central banks
Despite quantitative easing, forward-guidance and negative interest rates, global GDP growth has not taken off. Avoiding the business cycle should not be the priority of central banks or governments. Creating conditions that allow businesses and individuals to deal with the cycle, should.
Russia’s short-term resilience comes at a price
Just how badly have the oil slump and sanctions hurt Russia’s economy? On the evidence, not nearly as much as Western policymakers had hoped. Vladimir Putin has the resources to wait out Europe and the next U.S. president on sanctions, at least until he runs for reelection in 2018. But the long-term cost could be high.
Argentina’s new president will find it hard to make a fresh start
Let’s Change – Cambiemos – led by former Buenos Aires Mayor Mauricio Macri, won Argentina’s presidential run-off by less than 3 per cent of the popular vote. Headlines in Europe, the United States and Latin America heralded the opposition coalition’s victory as marking a reversal of the ‘pink tide’ – the swing to the left that has dominated South American politics ...