Posts tagged…Finance
Another small step
Fri, Jul 03 2009But it's impossible to ignore the significance of this continuing internationalization of the remminbi.
"Although it has no short-term implications for the full convertibility of the renminbi, the announcement provides ballast to the volley of political signals Beijing has been sending in recent months over its dissatisfaction with the US dollar." Extract from Financial Times
Budget transparency turns murky
Thu, May 28 2009So much for the Government's "Operation Sunshine" that was supposed to make budget program expenditure more transparent and accountable.
On the biggest single program item, Defense—a staggering 2.3% of GDP or $27 billion dollars next year alone—it seems to be a case of re-negging and obscurity.
"As the first budget after a new Defence White Paper, there is a glaring absence of substantive…
Read more…More transparency in the Federal budget
Fri, May 08 2009The budget to be introduced next Tuesday will be the first to fully implement the recommendations of the (former Senator Andrew) Murray Review on cutting gobbledygook and sloppiness out of budget estimates and on enforcing more rigorous reporting and audit of government use of our money.
All of this is a good thing. It is being managed by Lindsay Tanner's Ministry of Finance. But the program…
A spoon-full of toxin
Mon, Apr 06 2009When 'Uncle Joe' Stiglitz criticizes a program for 'socializing losses', there must be something seriously wrong.
The Geitner Plan for the U.S. banking system appears on the surface to be a way to create and isloate bad banks. These new institutions will be built by a partnership of government and private investors who will buy-up and hold the 'toxic' assets pending the market placing a firm and…
Renminbi reserve currency?
Mon, Apr 06 2009A development worth watching:
"Economists say the SDR plan is unfeasible for now but see Beijing’s currency swap deals [with Argentina, Malaysia, Indonesia, South Korea, Belarus] as pieces in a jigsaw designed to promote wider international use of the renminbi, starting with making it more acceptable for trade and aiming at establishing it as a reserve currency in Asia, something that would also…
Rodrik’s Plan B for global finance
Tue, Mar 17 2009
"[T]he logic of global financial regulation is flawed. The world economy will be far more stable and prosperous with a thin veneer of international co-operation superimposed on strong national regulations than with attempts to construct a bold global regulatory and supervisory framework. The risk we run is that pursuing an ambitious goal will detract us from something that is more desirable and…
An empty G20 communique
Mon, Mar 16 2009Writer Chris Giles in the Financial Times explains the five tests of 'relevance and importance' for Ministerial Communiqués. On his reckoning (I agree) the G20 Finance Ministers failed all of them.
"[T]he final statement crafted by the ministers was an attempt to suggest a comprehensive action plan was working. It lacked credibility and that will not help. Worse, the lack of substance threatens to…
Facing the facts (about banks)
Thu, Feb 19 2009"’It may be necessary to temporarily nationalise some banks in order to facilitate a swift and orderly restructuring,’ [Allan Greenspan] said. ‘I understand that once in a hundred years this is what you do.’" Extract from Financial Times
The most inconvenient fact is the questionable solvency of the banks, which has frozen credit markets.
Suppose the SWFs got cold feet?
Thu, Dec 04 2008"‘Right now we don’t have the courage to invest in financial institutions because we don’t know what problems we will put ourselves into,’ Lou Jiwei [Chairman of China Investment Corp] said on Wednesday. ‘My confidence should come from government policies. But if they are changing every week, how can you expect that to make me confident?" extract from: Financial Times…