monetary policy

Brazil hiked bank reserve requirements on time deposits to 20% from 15% and on cash deposits to 12% from 8%. Measures will take effect December 13 and an estimated BRL61 bln will be removed from the system. Central bank chief Meirelles…

European officials must have known they were going to disappoint the market with the decision to simply postpone draining liquidity. The firewall around Greece failed. The firewall around Ireland has failed. The politicians have dropped…

Market participants are already making their bets that the ECB will "print money". Below John Brynjolfsson tells Bloomberg why he thinks the ECB will monetise the sovereign debt problem. His firm is selling core Europe and buying the…

The US dollar rally continued to soften as the market prepares for the ECB rate announcement. The market expects the ECB to announce additional liquidity provisions to attempt to quell the fears emanating from Europe’s liquidity/solvency…

A guest post by Matt Stoller, the former Senior Policy Advisor for Rep. Alan Grayson and progressive commentator. Follow him on twitter @matthewstoller. In a cross-post from New Deal 2.0, Stoller outlines why Libertarians, Tea Party…

Walter Bagehot wrote an eponymous financial book in the 19th century called Lombard Street, giving advice on finance and banking. The most important and quoted piece of advice Bagehot gave was to the Central Bank, in this case the Bank of…

While this probably isn’t much proof of Keynes liquidity preference, at least in the extreme sense, it does help explain why M1 has grown significantly faster than broader measures of money supply, as cash simply shifts from M2 to M1.

A few weeks ago, when writing about the Irish debt crisis, I finished a post saying: Eventually, people may come around to Evans-Pritchard’s view: the only way out of this is via the ECB printing money and monetizing the periphery’s…

We have long felt that the market was underestimating tightening potential in 2011, but it appears to be coming around to our view. Weekly central bank survey shows market is now looking for an end-2011 policy rate of 12.25%, up from 12.0%…

The ECB could step into the breach but buying a large amount of sovereign bonds from the periphery. This would support the market, push down interest rates and potentially arrest the contagion. Moreover, as a large owner of peripheral…