Came across this interesting and dated speech of Nemat Shafik, ex IMF DMD and now BoE’s Deputy Governor. The speech was given at a conference in Delhi organised by CAFRAL.
As RBI evades Government/Parliament to adopt the fancied inflation targeting regime, things are changing in the inflation targeting world. They still say they are inflation targeters but are looking at all kinds of things. Call it flexible inflation targeting which is nothing but RBI’s now discarded multiple indicator approach.
One such case is Bank of England which is even more interesting as RBI is going to try and become like BoE over the years. The RBI committee report borrows heavily from Bank of England framework.
There has been lot of discussion on forward guidance of these central banks and more in case of BoE. The inflation targeting central banks have all kinds of targets (in the name of flexibility) like BoE has for unemployment. So it had this target that it will keep stimulating till unemployment touched 7%. As it touched 7.1% there were debates over whether BoE will stop its easy policy.
There were two solutions. One to lower the unemp threshold to say 6.5% like Fed did (though US unemp has touched tantalising close to 6.6%) or to revamp its fwd guidance statement. BoE chose the second option.
In its recent inflation report (which is also going to be taken out by RBI), BoE explained its changed stance. And interestingly, BoE will look at many indicators for its future policy just like RBI policy.
A nice interview of JD Power III, the guy who changed the auto industry by publishing the ratings and rankings of each auto product:
In 1968, J.D. Power III took the radical step of soliciting customer feedback about cars through consumer surveys. This move ultimately led automakers to shift their operations from a product focus to a greater focus on the customer. Today, J.D. Power and Associates is focused on gauging customer satisfaction across a broad array of industries.
Power is now the subject of a new book that documents that history: Power: How J.D. Power III Became the Auto Industry’s Adviser, Confessor, and Eyewitness to History, by Sarah Morgans and Bill Thorness. Recently, Power was a guest at theMack Institute for Innovation Management conference on the theme of disruptive technologies. Wharton professor of management John Paul MacDuffie sat down with Power to learn more about the experiences that led him to launch J.D. Power and Associates.
Nice bit..he has had quite a career working in different industries (started with auto industry thiugh) before starting on his own..
Much is written and known. Still it is useful to keep revising what went on.
Deepak Mohanty of RBI summarizes how Indian policy reacted to global financial crisis. He begins showing how Adv econ central banks intervened during the crisis. Then the impact on EMEs and finally on India.
Like EMEs, India suffered two rounds of crisis – one in Sep-2008 as crisis started and two in May-2013 when the word taper buzzed. In both, the policy responses were different. In the first, India had huge cushion given the robust economic conditions. In the second, the conditions were not as great:
Women in Parliaments Global Forum (WIP) has this annual summit discussing several issues related to gender, diversity etc.
One such session was stirringly titled as –” Reverse reality – what if: ‘Lehman Sisters’ or the sisterhood ran G20 and big business”.
Thanks to this speech by Jorg Asmussen of ECB at the panel that I came to know of it. He points how ECB is promoting gender diversity in ECB.
Nice thought though..Lehman sisters…
Mr. Norman Chan, Chief Executive, Hong Kong Monetary Authority has this nice speech with a provocative title. Obviously central bankers cannot save the world but they try and try hard. But most of the time they put the world into a bigger hole. Infact the fab book Lords of Finance does suggest central bankers in the four economies could have saved us from the great depression. But it was not just them but the politicians who were reluctant to let gold standard go. At the end of the day it is the political system and the historical path which matters. Central bankers are a part of this system and play their own bit.
He begins asking is the world worth saving?
US House Committee on Financial Services held a hearing on the topic.
Experts shared their concerns on central banks and their policies going ahead:
Useful to read different views. Posen argued for a more powerful Fed. Makin points to risks from monetary cliff, Orphanides shows how intervention helped avert the crisis and Lachman is not sure how these policies have helped..
One is always confused whether to compare 2008 crisis with great depression or 1907’s financial panic. Historians keep using the two as analogies with obviously more stress on former. It seems the origins of the crisis resembles more like 1907 panic but the impact is much larger on a global scale as seen during great depression.
Bernanke has this nice speech comparing the 1907 panic with 2008 one:
It was kinda amusing to read this statement from RBI’s still new Governor. So now each time the market declines, we will get a statement from RBI Governor saying all is well? I am also not sure about this whole personalisation of RBI. In the past, one usually saw such statements coming from RBI and not from the Governor. It reflected a more collective and institutional spirit of the central bank. Now it seems there is this whole agenda to create celebrity out of RBI Governor.