December, 2017

• 17 December

  Europe’s central bank faces decision time in 2018

  

  Mario Draghi had better enjoy his winter break. Entering the home stretch of his eight-year term, the European Central Bank (ECB) president unveiled a big jump in the growth forecast and told reporters he’s increasingly confident in the outlook. His demeanor seemed almost relaxed, winding down for the year. It won’t last. The relatively upbeat outlook foreshadows a watershed moment ...

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• 17 December

  Brazil is turning fiascoes into a much-needed win

  Well, here are some things you don’t see every day. A few headlines in Brazil are aligning to show Latin America’s largest economy a path back towards confidence — and, just possibly, to restore some of the world’s confidence in democracy. The first unusual circumstance is that Brazil’s central bank governor will almost certainly have to write a letter to ...

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• 17 December

  Tax bill won’t matter when it’s time to vote

  “There’s nothing wrong with supply-side economics that division by ten wouldn’t cure.” The quip came from Charles Schultze, the chairman of the Council of Economic Advisers in Democrat Jimmy Carter’s White House. It meant that improving incentives to work and invest would promote economic growth — but not nearly as much as tax-cutting enthusiasts believed. The point applies to the ...

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• 17 December

  Brexit redo is an idea whose time hasn’t come

  

  The idea of rerunning the UK’s historic 52%-to-48% 2016 vote to leave the European Union (EU) is understandably tempting for those in the 48% camp. Consider what has happened since: nail-biting negotiations with the EU, polls that show growing Brexit remorse, and evidence that the UK economy is suffering from uncertainty the vote has brought. The main UK political parties ...

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• 17 December

  From cold cash to cryptocurrencies

  Central banks and cryptocurrencies seem to come from different planets. While monetary authorities are the guardians of price and financial stability, the likes of bitcoin and ethereum have ignited a speculative frenzy mirroring the tulip mania of the 17th century. Yet, from Singapore to Sweden, central bankers are taking a close interest in digital currencies. They are right to do ...

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• 17 December

  Don’t be afraid of the net neutrality repeal

  

  Now that the US Federal Communications Commission has killed net neutrality, what happens next — assuming appeals fail — depends on the economic incentives for internet service providers. These incentives make it unlikely that there will be significant changes to the user’s experience. In at least two ways, the internet in the US wasn’t completely neutral even while the 2015 ...

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• 17 December

  Draghi says ECB will fall short of meeting inflation goal in 2020

  

  Bloomberg Mario Draghi stopped short of declaring that the European Central Bank will meet its inflation goal in 2020, signalling that the euro-area economy isn’t yet strong enough to warrant weaning off monetary stimulus. The ECB president unveiled updated economic projections that showed continued gro- wth over the next three years but only slowly improving consumer-price gains. Inflation will average ...

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• 17 December

  EU banks told to get crisis-ready by removing wind-down hurdles

  

  Bloomberg Big euro-area lenders face a choice; clean up the complicated corporate structures that make them difficult to wind down in a crisis, or watch Elke Koenig do it for them. Koenig, head of the Brussels-based Single Resolution Board, said in an interview that streamlining banks’ architecture and ensuring they can fund their own demise without taxpayers’ help will be ...

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• 17 December

  BOE: Brexit breakthrough positive for UK

  

  Bloomberg Bank of England policy makers said the breakthrough in Brexit negotiations this month could prove to be positive for the UK economy, which has lagged behind many of its international peers this year. Having long been criticised for being overly negative on the fallout from Brexit, the lat- est commentary from the central bank noted the recent progress in ...

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• 17 December

  Bank of Canada stresses caution amid debt woes

  

  Bloomberg Bank of Canada Governor Stephen Poloz said policy caution and uncertainties around the economic outlook remain prominent in the central bank’s thinking, even as an economy running close to capacity increases the likelihood rates will eventually rise. Poloz used his last speech of the year to highlight three subjects he called “slower-moving, nagging issues” that keep him up at ...

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