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
Yesterday in class a question arose as to whether the Federal Reserve (the US central bank) is keeping US government interest rates down by buying government bonds in the market. By adding to the demand for bonds, relative to a … Continued
Quantitative easing (QE) has become a highly controversial policy, particularly in the USA, where the Federal Reserve has been criticised by politicians, investors and academics up to and including the charge of treason. Yet the Chairman of the Fed, Ben … Continued
Financial repression is a term used by economists which means the government taking ordinary people’s savings to achieve some goal, typically to pay for the government itself, by exploiting imperfections in the financial system. It is an indirect form of … Continued
I last visited South Africa in 1987, during the apartheid period. Since at that time there was a cultural and economic boycott of the country, I should explain to alarmed friends that I was there because I was working for … Continued
Starting pay for new investment banking hires at the analyst (entry) level has gone up recently. This report shows that the investment banking employment cartel is now paying £45,000 for people starting this autumn in London. That looks like good news … Continued
The International Monetary Fund (IMF) is the one organisation that has come out of the financial crisis of 2007-09 in better shape than it went in. Set up to police the system of fixed exchange rates that was the basis … Continued
Australia is often known as the lucky country. Not that all of its history has been lucky but in the last twenty years it has been one of the largest beneficiaries of fast Chinese economic growth. About a quarter of … Continued
When you study economics at Cambridge you are forced to get your hands dirty with some actual economic data. My colleagues and I were confined to programmable calculators and manual entry of data in those days. But the point was … Continued