Govt treads carefully on economic relief measures, hoping normality is near
The government is trying to tread a fine line between fiscal prudence and cushioning the impact of the pandemic and inflation as it tweaks its economic policy in 2022.
Amazon halts plan to ban Visa credit cards in UK
Online retailer delays implementation of policy as companies work on ‘potential solution’
Fitch improves outlook to positive, sees investment grade hinging on fiscal performance and banks
Fitch got the schedule of rating reviews in the new year underway with an upgrade of Greece’s outlook to positive from stable, while it reaffirmed the rating at ‘BB’.
Insurers plan further shift away from bonds, says study
Private markets and infrastructure gain allure for conservative investors after jump in inflation
Net growth in ETF numbers almost doubles to a record 1,239 last year
Robust markets limit fund closures and spur optimism in new launches
Distressed debt titans Anchorage and Oaktree reveal industry shift
Low levels of debt defaults have forced funds to adapt investing strategies
FCA aims to use criminal powers in anti-money laundering probes
Move would follow conviction and £264m fine for NatWest for failing to comply with regulations
Tracking business dynamism during the COVID-19 pandemic
Business dynamism is key for creative destruction and to foster resource reallocation – both crucial elements of long-run economic growth. This column uses a new data visualisation tool to reveal large sector- and country-level heterogeneity in the impact on business dynamism of the COVID-19 crisis in 2020 and in recovery. Initially, firm entry fell sharply in all countries, but the pace of recovery varied across countries. Bankruptcies fell and remained below pre-crisis levels well into 2021.
The Mussa puzzle and the optimal exchange rate policy
The Mussa puzzle refers to the existence of a large and sudden jump in the volatility of the real exchange rate after the adoption of a floating exchange rate regime in 1973. It is a central piece of evidence in favour of monetary non-neutrality. In contrast to conventional wisdom, this column argues that the puzzle cannot be explained with sticky prices, and instead provides strong evidence in favour of monetary transmission via the financial market. This has important consequences for the design of optimal monetary and exchange rate policy.
Views on monetary policy communication by former ECB policymakers
Central bank communication, like monetary policy itself, has evolved significantly since the global financial crisis. This column reports on a survey among former ECB policymakers on the ECB’s monetary policy communication, which provides broad support for recent innovations in communication practices and suggests that communication with expert audiences is generally adequate. Nevertheless, it highlights some room for improvement along several dimensions, in particular related to communication with the wider public.
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