Bankers are people, too

My book is published!

Do you think banking is too hard for you? Are you convinced that all bankers are crooks? Would you like to follow the financial news, but you always get stuck on terms like derivatives, cryptocurrency or quantitative easing?

Then I have some good news. Continue reading “Bankers are people, too”

Book news!

Regular readers of this blog have probably noticed that I haven’t posted much lately. There is a good reason for that: I’ve been busy getting my book ready for print. I got the proof copy in the mail yesterday.

After working on this project for more than a year, it feels great to finally hold the result!

The book will be out next week, once the final corrections are done.

Bankers are people, too is an introduction to finance for the general public. In about 200 pages, I give a big picture overview of banking and money. The book explains how commercial banks create money, what central banks do, the distinction between banks and insurers, how quantitative easing works, the interaction between finance and the economy, and much more.

The topics in Bankers are people, too are not exactly bedtime reading material. That’s why the text is interspaced with cartoons. The ideas in the book are illustrated with plenty of examples and figures.

As soon as the book is out, I’ll have more to say on its content and why I picked this title.

Does having to sell my book mean that this blog is going to devolve into a series of ads for it? Well, no. I have a huge backlog of ideas for posts. Including one on blockchain/bitcoin, an assessment of QE, some reviews of books I’ve read, and how I (sort of) became an economist.

Should central banks have an Independent Evaluation Office?

Should the European Central Bank (ECB) have an independent evaluation office (IEO)? Benjamin Braun recently asked this question on Twitter.

My first reaction was: probably not, because the ECB already evaluates its past performance. However, after more thought, I have changed my mind. This post examines some recent failures of central banks; how an IEO could improve monetary policy going forward1; and what it would take for the IEO to be an effective department rather than a paper tiger. Continue reading “Should central banks have an Independent Evaluation Office?”

Michael Lewis on the US Department of Energy (highly recommended!)

Michael Lewis, the author of The Big Short, has written a great article for Vanity Fair.

Why the scariest nuclear threat may be coming from inside the White House is a fascinating portrait of the Department of Energy.

If you’re interested in politics, management, innovation, nuclear weapons or environmental pollution, you should read the article now.

I especially liked the description of how the managers appointed by the Obama administration could not transfer their knowledge to their successors. That’s because the newcomers weren’t appointed on time, or because the new political managers simply weren’t interested in learning the complexities of the DoE.

The story is a great case study that contains lessons which are relevant for all organizations. MBA students: read this instead of the Harvard Business Review!

What do physicists do? Research, software, and finance

After I got my PhD in physics, I started working for a bank. People often ask why I left physics. I usually reassure them by saying that this career choice isn’t exceptional. In fact, most physicists don’t work “in physics”.

A report by the American Institute of Physics (AIP) tracked down physicists working in the private sector, who earned their PhDs in the U.S. about ten years earlier. The respondents were employed in a variety of industries, working as consultants, managers, (software) engineers, etc.

But what about the rest of the world? Are the AIP findings representative for all physicists? Continue reading “What do physicists do? Research, software, and finance”

Een nieuw mandaat voor de ECB?

Gisterenmiddag (26 juni) organiseerde Leergeld haar tweede evenement in Brussel. Leergeld, een initiatief van Europarlementslid Sander Loones (N-VA), wil mensen bewust maken van de impact van de Europese Centrale Bank (ECB) op hun financiën.

Het thema van de bijeenkomst was Een nieuw mandaat voor de ECB?. Twee eminente sprekers, Pascal Paepen en professor Lex Hoogduin, presenteerden hun visie op het beleid van de ECB. Continue reading “Een nieuw mandaat voor de ECB?”

My favorite finance and economics podcasts

Podcasts – radio shows you can download – are a great medium when you’re driving, in the gym, or cooking dinner.

Here is my current top four podcasts that deal with money and economics in general. For each series, I’ve picked one episode that I enjoyed a lot. Continue reading “My favorite finance and economics podcasts”

Problems with Christopher Balding’s analysis of Chinese banks and currency

Professor Christopher Balding has published a blog post with his views on the link between the China’s banking system and its currency: Can China Address Bank Problems without Having Currency Problems?

He believes that “it is much more likely that if there are systemic banking issues that currency problems will also arise.”

It is laudable that Prof. Balding summarizes his arguments. By being explicit about the assumptions, readers don’t just have to trust his opinion. Instead they can follow the logic and evaluate the strong and weaker points themselves.

The goal of this post is to counter some of the points listed by Balding to support his conclusion. Continue reading “Problems with Christopher Balding’s analysis of Chinese banks and currency”

A lost decade (for bank investors)

2007 seems ages ago. It was the final year of another era, the time before the Crisis. Whatever you prefer to call it – credit crisis, debt crisis, global financial crisis, banking crisis – the crisis has scarred the shareholders of banks. Even though ten years have passed, most bank stocks still have not recovered to their pre-crisis highs.

This post looks at the evolution of the stock prices of the largest banks1 in Europe and the US. For European banks, I made a distinction between institutions with headquarters inside and outside the euro area. Continue reading “A lost decade (for bank investors)”