The latest data on China’s foreign exchange reserves, showing a rise of $130 billion to $3.4 trillion, suggest that capital is flowing into China again after an apparent outflow ahead of the change of government in late 2012. There is also … Continued
A New York Times article recently reported data from Rosenblatt Securities showing that the percentage of total US stock trading done “off-exchange” has risen from about 15% in 2008 to over 35% in 2013 and occasionally as high as 40%. What … Continued
The US magazine Foreign Policy recently ran an article titled “Hugo’s Banker” (meaning the late President Chavez of Venezuela) describing as the world’s most powerful banker Mr. Chen Yuan, the Chairman of China Development Bank (CDB). In what sense is … Continued
A great piece of research from the authors at the University of Michigan and Princeton University (*) tests the hypothesis that the bankers inside the sub-prime mortgage bubble knew it was all too good to last. They find the hypothesis false. … Continued
A sovereign wealth fund (SWF) is an organisation that manages financial and other assets on behalf of a government or nation. But what about the holdings of foreign exchange reserves by central banks? These assets, often much larger in size, … Continued
It’s uplifting to visit a city that has a rich and glorious past but also an exciting future. So many cities attract tourists to their historic sites and buildings, who leave with a slightly melancholy sense that the best has … Continued
I’ve written before about the dismal outlook for the western banks, suffering from overcapacity, increasing regulation and slow GDP growth (or continued contraction in the case of much of Europe). A new McKinsey report reinforces my pessimism. In particular McKinsey … Continued
It might seem straightforward to measure how much debt a government has. But it’s not that simple. First, we have to decide what is “debt”. We should obviously include debt securities and bank loans. But what about pension and insurance … Continued
An essential function of the financial system is paying for things. We take for granted the ability to move money from companies to employees, from customers back to companies and for a myriad of daily transactions. This aspect of the … Continued
A key feature of macroeconomic analysis is the relationship between a country’s savings and investment rates. Savings represent income that is not consumed. Investment means spending on assets that will last for some period of time, such as factories, houses, … Continued
Although there is nothing much to rival the views from the top of the Empire State Building and GE Building (the “top of the rock”) the part of New York that has only recently become my favourite is more remarkable … Continued
A few weeks ago I took a group of visiting Chinese finance executives to visit two banks in London, as part of a Cambridge Judge Business School Executive Education course. Although technically both are described as banks, the two institutions … Continued
Perhaps I’m a bit naive, but in my years in the finance business I met very few people who struck me as unethical. Selfish, blinkered, dull and sometimes even quite stupid, yes, but seldom really bad. Perhaps they were good … Continued
The Financial Times reported yesterday that Germany was making an audit (*) of its gold holdings, much of which are abroad. The newspaper Suddeutsche apparentlu estimates that about 1,500 tonnes of the total 3,400 tonnes of German owned gold are … Continued
I’ve just read an interesting, thoughtful and of course slightly self-serving speech by the Governor of the Bank of England, Sir Mervyn King, for whom I have a great deal of respect. Titled “Twenty Years of Inflation Targeting” it reflects … Continued