Stop bike-shedding, ECB

Last week, Positive Money Europe celebrated its launch with an event in Brussels: Time to rethink the European Central Bank.

Several speakers noted that it is important for central banks to communicate with society, not only with the financial sector.

One of the people in the audience remarked that it is not enough that the ECB explains what it is doing. It also needs to respond to the needs of society.

The representative of the ECB replied that his institution has become more transparent in response to feedback from the public. For example, the meeting notes of its board are published.

However, this is a classic case of bike-shedding. Publishing notes is a trivial gesture. The real problems in the euro area are massive unemployment in the southern countries and the poor performance of the European economies compared to the US. A genuinely responsive central bank should do much more to support the well-being of Europe’s citizens.

The ECB should care about boosting economic growth, not the color of its bike shed.

So I agree, it is time to rethink the ECB. Let’s break some political taboos and rev up the engines.

Only the paranoid banks survive

“Sooner or later, something fundamental in your business world will change.” – Andrew Grove, Only the Paranoid Survive

Everyone hates banks. This has created an opportunity for business gurus, futurists and charlatans to proclaim the imminent death of banks. Stories on how technology will make traditional banks obsolete are eagerly picked up by the media. Continue reading “Only the paranoid banks survive”

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. Continue reading “Michael Lewis on the US Department of Energy (highly recommended!)”

WannaCry about cybersecurity? Consider this first

In an event that has been called the WannaCry ransomware attack, hackers encrypted data on computers all around the world. The victims – which included hospitals and car factories – had to pay ransom in Bitcoin to get their files back.

Computers without up to date operating systems were particularly vulnerable to the attack.

People who have never come into contact with the internal IT operations of a large company find this hard to understand. Why don’t companies just install the latest patches, like private persons do on their home computers?

Software engineer Jürgen ‘tante’ Geuter has a nice blog post that explains why things are not so simple in the real world: “Why don’t they just update?” Continue reading “WannaCry about cybersecurity? Consider this first”

Baby steps towards more ECB accountability

Transparency International EU has published a report about the European Central Bank (ECB). The author of the report, Dr. Benjamin Braun, has analyzed the independence, transparency, accountability and integrity of the ECB.

Several media organizations covered the findings.

The launch of the report was accompanied by a symposium in Brussels on Tuesday. During an interesting panel discussion, it was debated how the ECB can improve the way it works. Carl Dolan and Leo Hoffmann-Axthelm from Transparency International EU stressed that the ECB had cooperated with the NGO.

Benoît Cœuré addresses the room. Source.

Many topics were covered during the discussion. For example the status of whistleblowers, freedom of information requests, and the “cool-off period” demanded when ECB executives move to the private sector.

But my main interests were monetary policy and the ECB’s supervision of the banking sector. Continue reading “Baby steps towards more ECB accountability”

Annual reviews and other Soviet business practices

As the end of 2016 is quickly approaching, it is time to reflect on the past year. For people working in large bureaucratic organizations like banks and government, this means filling out performance evaluations. Organizations collect these records of their employees’ professional histories. Managers can use old reviews to motivate (non) promotions of their subordinates.

One intriguing aspect is the fact that employees are expected to write negative things about themselves. In management speak this is called “opportunities for growth” or some other bullshit term. But basically the writers have to incriminate themselves. The self-evaluation provides the proverbial rope for somebody to hang them with.

This reminded me about something I read in a book1 by historian Orlando Figes on the Soviet Union. Members of the Communist Party had to write an autobiography which was regularly updated. The higher-ups in the hierarchy could use these documents to control their underlings and their rivals.

The more you think about it, the more parallels there are between modern business life and Soviet society.

It is well known that corporations are not democracies nor markets. But this post focusses on the cultural similarities that caught my attention. Continue reading “Annual reviews and other Soviet business practices”

Robots zijn niet de enige oorzaak van het banenverlies bij de banken

De voorbije maanden hebben verschillende financiële instellingen aangekondigd dat ze banen zullen schrappen. Gisteren meldde KBC aan dat ze 200 werknemers op vervroegd pensioen zal sturen. Sommige commentatoren wijten dit aan het feit dat machines en computers taken overnemen van de werknemers. Deze analyses zien echter twee bijkomende oorzaken over het hoofd, namelijk procesverbeteringen en delokalisatie.

Dankzij technologie moeten klanten inderdaad minder vaak aanschuiven aan het loket van een bankkantoor. Overschrijvingen doen we met homebanking of op de smartphone. Geld halen we uit de automaat. Maar de wereld achter de schermen van het kantoor en de apps is voor de meesten onder ons een black box. Nochtans verandert de organisatie van het werk in deze backoffice ook volop, en niet enkel door computers. Continue reading “Robots zijn niet de enige oorzaak van het banenverlies bij de banken”