Throwing around the negative interest rates idea has become very trendy all of a sudden with Draghi, Praet and Constancio weighing in and, we’d argue, using the threat to substitute for policy impotence.
So, was Bank of England deputy governor Paul Tucker doing the same thing on Tuesday morning in front of a Parliamentary committee? Using a jedi-trick to talk down sterling perchance? It’s not a phrase you use lightly and it seems unlikely he would have whacked it out completely unintended. But it has to be said, if he was going Jedi here, the effect didn’t last all that long. Read more
Some emails between Paul Tucker and Bob Diamond courtesy of John Mann MP. Not as explosive as billed but there is a Libor-headed email to Bob that makes reference to HSBC, RBS “Stuart”, “Johnny” and Mark Dearlove from May 2008.
Click through the pics for the full docs (although there ain’t that much more): Read more
Has the Bank of England been reading Chris Giles?
With the press looking to work up a decent Fed angle to the Libor furore, Britain’s central bank has just gone ahead and published correspondence between Sir Mervyn King and Tim Geithner, then president of the NY Fed, along with Paul Tucker’s related correspondence with the BBA. Read more
Click the pic for the live* feed from Wilson Room, Portcullis House…
Revealing little, but here it is — the Bank of England’s response to a Freedom of Information Act request from John Mann MP, seeking “copies of emails and transcripts of telephone conversations between Deputy Governor, Paul Tucker and Bob Diamond, Chief Executive of Barclays between 1 October 2008 and the 30 November 2008.”
Covering letter… (click the images) Read more
We are seizing control of the regular Wednesday US Markets Live slot to bring you live commentary on Bob Diamond’s testimony to the Treasury Select Committee.
The show kicks off at 2pm, BST, here. Read more
From Barclays’ written submission to the Treasury Select Committee. Click for better legibility.
First, a tip for Bob Diamond’s successor as chief executive at Barclays: Don’t threaten the Bank of England. It will get you deported. Read more
If one article sums up how ETFs have come to change the market structure of the equity universe, it’s this one from Paul Amery at Index Universe on Thursday.
As he recounts, the thing that really worries regulators is the role ETFs play in the shadow banking world today. To what degree do their security deposits fund banks, and what sorts of maturity transformation is going on behind the scenes? Also, to what degree do ETF providers fulfil a credit intermediation role by transferring capital and liquidity from savers to borrowers, even when most ETF investors are unaware of the fact that their “deposits” may not be fully capitalised at all times? Read more
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
Talk about aiming high, Bank of England.
The central bank’s deputy governor for financial stability Paul Tucker has given a speech on Tuesday about the social responsibilities of the banking sector and associated reforms. The centrepiece: banks must prepare themselves for an “orderly wind-down” in case they fail. Read more
The Bank of England’s Paul Tucker may have been giving a speech to the Bank of Japan, but he was not focusing on quantitative easing.
Instead the deputy governor for financial stability was talking bank assets and the role of the Bank of England (via the Special Liquidity Scheme, now replaced by the Discount Window Facility) in the current crisis — qualitative easing, if you like. Some of his points are surprisingly sensible, though some, like potentially recouping the cost of any any special programmes from banks instead of taxpayers, probably won’t be welcomed by the financial institutions themselves. Read more
From the Treasury:
The Chancellor today announced that David Blanchflower, external member of the Monetary Policy Committee (MPC), will step down when his term expires at the end of May 2009. In a letter to the Chancellor, David said: “My term on the MPC runs out on 31 May 2009. I am writing to inform you that I will not be seeking a renewal. My intention all along was to only serve a single term, having been given three years sabbatical leave from Dartmouth. I will, of course, complete my full term. Read more