Comment, analysis and other offerings from Friday’s FT,
Opinion: Big risks for the insurer of last resort
Martin Wolf writes: The UK government looks increasingly like a python that has swallowed a hippopotamus. In acting as insurer of last resort to the British-based banking system, it is taking on huge risks on behalf of taxpayers. If this turned out to be a global depression, with huge losses for British-based banks, fiscal solvency might even come into question. Can this make sense? I doubt it.
Comment: How the Fund can help save the world economy
Ted Truman, senior fellow at the Peterson Institute for International Economics, writes: When G20 leaders gather in April, they will have one policy instrument available to address the financial crisis co-operatively, concretely and credibly. They should make a commitment to an immediate, one-time allocation of $250bn in special drawing rights by the IMF to its 185 member countries.
Editorial comment: Two central banks, only one answer
The Bank of England and the European Central Bank interest rate-setting committees both met on Thursday. They face similar economic crises but gave very different answers to the problems facing them. The UK central bank is acting in proportion to the severity of the crisis. The eurozone’s monetary authority is doing far too little.
Lex on Chinese stimulus
Pick a number, any number – or better still, don’t. China, already presiding over one of the world’s largest fiscal stimulus packages (roughly double America’s as a percentage of GDP, taken at face value) has hinted at further spending in recent weeks. Talk is cheap and effective: the Shanghai Composite index is up by a fifth this year.
The Short View: Monetary measures
FT Video: John Authers on the Bank of England’s plans to buy long-dated gilts and its effects on markets.