During the last few months some central banks have done things which I applaud, while others have done things which I find both incomprehensible and incompetent. In the current climate, it’s easy to misread the markets.
The Fed seems not to understand why there is so little inflation with the economy doing so well that a rate rise in December is probable and two or three more increases in 2018 are possible. There are various pundits that claim the US is doing well on many fronts with the unemployment percentage employed as an argument to prove that the Wall Street rally is thoroughly justified.
The Swiss National Bank on Wednesday revealed the country’s new ten franc note, which will go into circulation on October 18th. The latest in the new series of banknotes that is being issued in stages, the ten franc note follows the 50 franc and 20 franc notes that entered circulation in April 2016 and May 2017 respectively.
It may be that nominally independent central banks are not really as independent as they seem.
Frankfurt is emerging as the frontrunner in the battle for the post-Brexit spoils, as the German city lures banks and jobs out of London amid uncertainty over divorce talks.
After months of stalled negotiations in Brussels between Britain and the EU left London’s future shakier than ever, a growing number of banks are stepping up their contingency plans by leasing office space in other European cities.
While rival hubs have jostled to attract London’s bankers, Frankfurt – the city known by locals as Mainhattan, indicating its dreams of financial stardom – has established a clear edge over competitors such as Paris, Dublin and Amsterdam.
Most big eurozone banks are well braced for possible future interest rate rises, the European Central Bank said Monday after running dozens of them through a stress test. On a scale running from a top mark of 1 to the lowest of 4, 60 out of 111 banks scored 1 or 2 in the test, the ECB said.
For the first time, the stress test examined how sudden changes in interest rates will affect banks’ income and the value of their assets. Of the other banks, 34 received a mark of 3 and 17 scored a 4.
The Swiss National Bank’s holdings of foreign currency touched a record 724.4 billion francs ($739 billion) in September, an increase of 1 percent from August. The franc slipped against both the euro and the dollar last month, two currencies in which the central bank holds a large portion of its reserves. Still, the franc remains strong, requiring the SNB to stick with its policy of negative rates and occasional interventions, President Thomas Jordan said earlier this week.
UBS Chairman and former Bundesbank President Axel Weber said on Wednesday bitcoin does not fulfill some of the most important functions of currency, the latest senior banker to express skepticism about the cryptocurrency.
"I get often asked why I’m so skeptical about bitcoin, it probably comes from my background as a central banker," Weber said at a conference organized by the Swiss Finance Institute. Axel Weber previously served as head of the Bundesbank, Germany’s central bank.
