Archive for February 12th, 2019

Paul A. Volcker’s “Keeping at It:” Messages for Country and World

February 12, 2019

Edwin Truman of PIIE distills the main messages from Volcker’s memorial:

Why would Paul Volcker, who tamed inflation as chairman of the Fed in the 1980s, write a memoir in his 91st year rather than go fishing? Because he is deeply concerned and has a message about the direction of the country and the world. The message proclaims three verities drawn from his career of service in the public and private sectors: stable prices, sound finance, and good government.

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How will we transition to a LIBOR free world?

February 12, 2019

Nice speech by Edwin Schooling Latter, Director of Markets and Wholesale Policy at the FCA of UK.

There is now wide recognition that LIBOR will come to an end. Thanks to the agreement reached with 20 panel banks to continue submitting until end 2021, LIBOR is not expected to cease before that point. But, when I spoke at the International Swaps and Derivatives Association’s (ISDA’s) annual Europe conference in September last year, on this same stage, an audience poll found just over 50% thought LIBOR would stop before end-2022. Today, I would like to explore in a bit more detail not whether LIBOR will end, but how it will end.

This has important implications for contractual design. It is relevant in particular to how ’fallback‘ language in outstanding contracts that continue to reference LIBOR will and should work. Understanding the way in which the end of LIBOR will play out is key to choosing the right trigger point for moving to a new or replacement ‘fallback‘ rate.  

It will be quite something to forget LIBOR in our minds as well…

How central bank boards/committees are different from private ones?

February 12, 2019

A nice speech by outgoing Bank of England’s FPC (not MPC) external member: Martin Taylor.

He speaks about how central bank boards/committees are different from the ones in private sector. He also discusses several others things:

  • Role of FPC
  • Role of external members vis a vis internal members
  • central bank independence
  • central bank neutrality: he rightly says that central banks should strive to be neutral but should not be neutered in the process
  • Brexit

On the differences between private board and public ones:

(more…)


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