Archive for July 18th, 2019

Revisiting the Coyne Affair: A singular event that changed the course of Canadian monetary history

July 18, 2019

Given how central bankers are being put under all kinds of pressure and even threatened, the affair of James Coyne, Governor of Bank of Canada (1955-61) is worth reading. He could not be fired so the Government actually declared the Governor’s position as vacant and advertised others to apply.

Pierre Siklos in this paper reviews the events and circumstances which forced Coyne to resign:

The Coyne Affair is the greatest institutional crisis faced by the Bank of Canada in its history. The crisis took place in 1959-1961 and led to the resignation of the Governor, once he was cleared of any wrongdoing. The crisis eventually resulted in a major reform of the Bank of
Canada Act. Archival and empirical evidence is used to assess the performance of monetary policy throughout the 1950s. In doing so, a real-time dataset is constructed for both Canada and the US that permit estimation of reaction functions. I find that the case against James Coyne is ‘not proven’.

It was Coyne saga which paved way for better appointment rules for Canada’s central bankers.

Here is another interesting account written in 1963:

At 5.45 p.m.. a Bank of Canada official flashes the word to the parliamentary press gallery that the governor will be leaving his office at 6.15. Reporters and photographers rush across Wellington Street.

At 6.21. six minutes behind schedule, a bulging black briefcase in his left arm. and guiding his misty-eyed wife with his other hand, Coyne steps out of the bank’s elevator. He shakes hands with the elevator operator. Seeing the wall of newsmen, he barks out a brusque “No comment.” then catching one of the reporters questions. “Do you have any 1 st words?” he replies: “No. Not for another forty years.” Then he walks out of public life.


The Banco de España and its promotion of economic history research

July 18, 2019

Spain’s central bank has been actively promoting research in economic history.

Governor Pablo Hernández de Cos in a speech lists the steps take to promote history:

Firstly, the Banco de España regularly organises conferences focusing on the discussion of aspects relating to economic history. This year, for example, on the occasion of the sixtieth anniversary of the Stabilisation Plan, the Banco de España will, next October, be organising
a conference in Barcelona focusing on the analysis of the Plan. It will likewise pay tribute to the figure of Joan Sardà. I trust you will be able to join us at this conference.

Also, since 2015 the Bank has organised annually a top-level international economic history conference aimed at academia. In recent years, both our central bank researchers and external researchers financed by us have been selected to present their papers. In this year’s edition, the conference has been jointly organised with the CEPR’s Economic History section.

Secondly, since 2009, the Banco de España has had a biannual programme in place for economic history research grants. Under the programme, universities commit themselves, following an agreement signed with the Bank, to pursuing the research selected and to
presenting and publishing their findings. The possibility of collaboration between researchers from both institutions is also envisaged.

Since 1980, under the initial backing of Luis Ángel Rojo, the Bank has published a collection of monographs relating to monetary and financial history, Spanish and international alike, under the name “Economic History Studies” (more familiarly known as the “Red Series”). To
date, this collection had solely included papers prepared or financed by the Banco de España. Currently, however, with a view to extending and maintaining its continuity, we are assessing opening it up to other research not necessarily financed by the Bank.

Lastly, allow me to stress another of the grounds for a publication such as that we are presenting today. It is a question of transparency, understood as the possibility of sharing information with society as a whole. As I pointed out in one of my early public appearances
as governor of the Banco de España, I consider making high-quality statistical information available to researchers as absolutely crucial for sound analyses and research enabling better-founded economic policy decision-making. In this respect, we intend in the coming years to pursue various projects that allow these researchers to have access to our statistical information, thereby enabling different avenues of analysis and research of benefit to society as a whole.  

Sebi chief questions Budget plan for transfer of surplus funds to govt

July 18, 2019

The markets are buzzing with the story of Jalan Committee asking RBI to transfer its surpluses in 4-5 tranches. This is on expected lines but we still have to wait for the final report to figure the details.

Meanwhile, we should also be focusing on how Government has even asked SEBI to transfer its reserves . The employees of the regulator have protested against the decision.

Now it seems SEBI chief has written to the government questioning the move:


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