Two tables below the break, courtesy of Credit Suisse, detailing the ECB board’s easing predilections. Tabled story short, the increasing north/south divide that has accompanied the euro area’s drawn out crisis has lead to the balance of power shifting to the periphery. Or: doves in the ascendant. Interesting too that the Bundesbank might thus be pushing for ECB minutes to be released in order to quell those national interests.
Out of the 23 Governing Council members including 6 Executive Board members 13 are dovish or very dovish as we show in the table below, where we have assessed Governing Council members and their recent statements. The dovish cause of the periphery is further helped by the fact that three core representatives, both French nationals and the governor of the central bank of Belgium, have also been typically perceived to be in the more dovish camp. Increasingly the Bundesbank is thus becoming more marginalized which might explain the Bundesbank having consistently increased the volume of its verbal interventions throughout the crisis.
I guess I would add to that, though, that, you know, each of these nonstandard programs does have various costs and risks associated with it with respect to market functioning, with respect to financial stability, with respect to the exit process, and so I don’t think they should be launched lightly. I think there should be some conviction that they’re needed, but if we do come to that conviction, then we’ll take those additional steps.
– Ben Bernanke on further unconventional Fed measures, at June’s FOMC presser. (Page 8 here, in response to Binyamin Appelbaum’s question.) Read more
The minutes from the latest MPC meeting are out, and it seems the doves are gaining ground:
Regarding the stock of asset purchases, five members of the Committee (Charles Bean, Paul Tucker, Ben Broadbent, Spencer Dale and Martin Weale) voted in favour of the proposition. Four members of the Committee voted against the proposition. The Governor, David Miles and Adam Posen preferred to increase the size of the asset purchase programme by £50 billion to a total of £375 billion. Paul Fisher preferred to increase the size of the asset purchase programme by £25 billion to a total of £350 billion. Read more
The minutes of the last MPC meeting are out and here’s the price action in the Great British Krona.
The minutes of the Bank of England’s MPC meeting in March released on Wednesday morning show that the committee lines up in exactly the same way as it did last month.
One member (Posen) wants to ease monetary policy, by increasing QE. Five members (King, Tucker, Fisher, Bean, Miles) voted for no change at all. Two members (Weale, Dale) voted for a 25 basis points increase in bank rate. And one member (Sentance) voted for a 50 basis point increase. Read more
The Bank of England’s monetary policy committee voted 8-1 in favour of leaving interest rates and the amount of quantitative easing unchanged at its early August meeting, with little sign that calls for tightening by one member were gaining ground, reports the FT. Minutes of the meeting, published Wednesday, show the committee believed there was a risk that demand was weakening but also that inflation expectations could become de-anchored after a long period of above-target inflation. Lex meanwhile considers “three mysteries” contained in the minutes.
Minutes from the Bank of England’s last policy meeting on November 4 and 5 have been released. And there are number of points to pick over.
The most interesting is that the MPC was split three ways in voting to extend asset purchases by £25bn. Read more