It seems there are two bitcoin camps: the true believers and the naysayers. Izabella Kaminska from FT Alphaville in particular has been explaining for years why cryptocurrencies are not the utopia some imagine them to be. In this post, I summarize my own reasons why I don’t think bitcoin is a credible threat to the banking industry.1Continue reading “My beef with bitcoin bulls”
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?
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?”
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.
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.
Or to be more precise, debate about the financial institutional framework edition.
How should banks be regulated? Ten years ago, this question would have only interested a few specialists. Discussions about bank supervision and the role of the central bank were way too boring for the general public1. Besides, bankers surely knew what they were doing?
The global financial crisis and its aftermath changed this complacent attitude. The existing rules did not prevent the worse financial crisis since the 1930s. Governments had to bail out banks at a moment’s notice. Politicians took drastic decisions during the panic of September 2008. While those actions were taken with little democratic oversight, national leaders2 were the only agents willing and able to stop the collapse.
The professors get to the hyperinflation at 8:20 into the conversation. Fernández-Villaverde tells the story of how inflation got out of hand when French and Belgian troops occupied the Ruhr2. The Weimar government encouraged workers to resist the military occupation. Strikers were paid with money freshly printed by the Reichsbank, the German central bank. The combination of no real economic production with an increasing amount of Papiermarks tanked the purchasing power of the currency. The hyperinflation began. Continue reading “Why do Germans remember the Weimar hyperinflation?”