Valiollah Seif discusses Iran's economy.
Valiollah Seif discusses Iran's economy.
Jacob J. Lew discusses America’s leadership in the global economy.
Experts discuss the Federal Reserve's decision to raise interest rates and what it means for markets and the global economy.
CFR experts discuss the Federal Reserve's interest rate decision.
Central bank currency swaps are becoming the new cross-border tool of choice in financial crisis management. This interactive explores the rapid growth of currency swaps since 2007 and its implications for the global financial system.
China's new Asia Infrastructure Investment Bank has raised questions about United States policy in Asia. Several European nations, South Korea and Australia have signed on to China's initiative, which seeks to raise $50 billion to $100 billion for Asian development. While the U.S. remains cautious about this new China-led effort to fund infrastructure and development, it should welcome the participation of others.
Benn Steil and Dinah Walker analyze the market reaction to the publication of the European Central Bank's long-awaited bank stress test results. The ECB's coddling of stress-tested banks — through the use of inflated inflation estimates and generous treatment of tax offsets against future profits which may never arise — precipitated a sell-off of bank stocks in a period when broad European indexes were up significantly. Unlike with the successful 2009 U.S. stress tests, there is no credible backstop of public funds available for Eurozone bank recapitalization, which would account for the ECB's reluctance to draw attention to the sector's undercapitalization.
The new BRICS Bank and Contingent Reserve Arrangement initiatives are, despite stated Russian ambitions, wholly unconvincing responses to the shortcomings of the Bretton Woods institutions and the dollar-based global financial architecture.
Benn Steil and Dinah Walker argue that the negative interest rate policy is unlikely to spur eurozone growth without more ambitious banking interventions first.
"Katsuyama and his team did measure how much more cheaply they bought stock when they removed the ability of some other unknown trader to front-run them. For instance, they bought 10 million shares of Citigroup, then trading at roughly $4 per share, and saved $29,000 — or less than 0.1 percent of the total price… It sounded small until you realized that the average daily volume in the U.S. stock market was $225 billion. The same tax rate applied to that sum came to nearly $160 million a day."
Benn Steil's latest op-ed in the Wall Street Journal, co-authored with Dinah Walker, explains why the ECB's anticipated foray into more aggressive monetary stimulus next week won't have any significant effect on the availability and cost of private-sector credit. The ECB believes that its ongoing bank stress tests will help revive the eurozone's moribund banking industry, but they argue that the tests are counterproductive without a mechanism in place to assure sufficient recapitalization of banks that fall short—as there was in the United States in 2009.
Benn Steil and Dinah Walker argue that the ECB's bank stress tests will roil rather than calm markets if recapitalization funds are not set aside in advance, as they were in the case of the highly successful U.S. tests in 2009.
"To meet quotas, employees have opened unneeded accounts for customers, ordered credit cards without customers' permission and forged client signatures on paperwork. Some employees begged family members to open ghost accounts."
On December 10, 2013, the Federal Deposit Insurance Corporation approved the "Prohibitions and Restrictions on Proprietary Trading and Certain Interests in, and Relationships With, Hedge Funds and Private Equity Funds," part of the Dodd-Frank Act commonly known as the Volcker Rule.
"After a decade of paedophilia scandals, the allegations of financial impropriety seemed set to unleash another storm of criticism and had to be addressed. Outside auditors as well as financial risk consultants were already coming into the Vatican but the arrest of Scarano made the case for reform unavoidable. "We cannot have any more scandal. It is so shameful," a senior member of the Vatican's financial administration said."
People routinely blame politics for outcomes they don't like, often with good reason.
Peter Orszag writes that the Reserve Bank of New Zealand's limits on high loan-to-value mortgages are a model for the kind of actions the U.S. Federal Reserve could have taken to manage the U.S. mortgage market and reduce the risks that the housing bubble posed to the financial system.
"As money has rushed into emerging markets in recent years, this has created an image of abundant liquidity. But this image may be dangerously illusory, some policy makers fear, as one of the little-noticed ironies of the 2013 financial system is that there may now be fewer–not more–shock absorbers in the markets than there were before 2008. This factor may explain why this summer's gyrations in emerging market assets were so dramatic."
"Managing a bond fund these days is a peculiar business. Global central banks have aggressively supported government bonds, driving up—many would say distorting—their prices. Market observers generally agree that support will eventually ebb, bringing prices back down and bond yields up, but no one can be certain when. What is an investor to do?"
Eric Rosengren, president and chief executive officer at the Federal Reserve Bank of Boston, discusses monetary policy.
To ensure the success of Myanmar's historic democratic transition, the United States should revise its outdated and counterproductive sanctions policy.
Blackwill and Campbell analyze the rise of Chinese President Xi Jinping and call for a new American grand strategy for Asia.
Williams argues that greater U.S. involvement is necessary to enhance the quality and success of peacekeeping missions.
Kurlantzick offers the sharpest analysis yet of what state capitalism’s emergence means for democratic politics around the world. More
In a cogent analysis of why the United States is losing ground as a world power, Blackwill and Harris explore the statecraft of geoeconomics. More
Takeyh and Simon reframe the legacy of U.S. involvement in the Arab world from 1945 to 1991 and shed new light on the makings of the contemporary Middle East. More
Learn more about CFR’s mission and its work over the past year in the 2015 Annual Report. The Annual Report spotlights new initiatives, high-profile events, and authoritative scholarship from CFR experts, and includes a message from CFR President Richard N. Haass.
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