After Dexia's shares plunged last week amid fears it could go bankrupt, the French and Belgian governments stepped in and guaranteed its financing and deposits. The bank said in a statement on Friday that trading in its shares would remain frozen until it could "communicate more precisely on the various choices and options concerning the future of the group". … [Read more...] about France and Germany agree plan to recapitalise European banks
Policymakers abandoned the nostrums that they had held dear for the past three decades. Copies of John Maynard Keynes's General Theory were dusted down to find a cure for a slump that the high priests of free-market economics said would never happen. Blanchflower won his battle on the MPC. Interest rates were slashed to the bone; central banks started to print large quantities of electronic money to compensate for the credit crunch; taxes were cut and public spending increased. Governments rediscovered the urge to intervene. Germany provided subsidies to keep workers in jobs. America bailed out the automobile industry. The UK put pressure on mortgage lenders to show forbearance to struggling home-buyers. … [Read more...] about Lehman Brothers collapse: five years on, we’re still feeling the shockwaves
The Fed is not changing its ultimate mandate, which is to balance price stability with maximum employment. But it has announced that it will no longer preemptively slow down the economy if the labour market begins to look tight and it will treat its 2% inflation target as an average. Given many years of low inflation, the Fed will now tolerate an equivalent period of higher inflation to make up for the difference. Fundamentally, the Fed is acknowledging that the bargaining power of labour is far lower than in the 1970s and the risk of an inflationary blowout remote. … [Read more...] about The world’s central banks are starting to experiment. But what comes next?
With the coalition in tatters, the opposition Smer party, led by former prime minister Robert Fico, are widely expected to vote for the measure next time. Fico, who would like his old job back, has said he supported the bill on an ideological level but refused to help Radicova unless she promised either a radical cabinet reshuffle or fresh elections. With the latter now firmly on the cards, his party will almost certainly vote for the bailout. "Slovakia has to approve the fund," he said. … [Read more...] about Slovakia rejects multibillion euro bailout fund to deal with debt crisis
Fraser will also be one of the few women at the top of the global banking industry. In the UK, NatWest Group – formerly known as Royal Bank of Scotland – appointed Alison Rose as its chief executive in September 2019, while in the public sector Christine Lagarde was made head of the European Central Bank in July 2019. … [Read more...] about Citigroup becomes first big Wall Street bank to be run by female CEO