The ripples of the UK’s 23 June vote to leave the European Union are spreading internationally. Sterling has fallen 13% against the dollar. Interest rate rises everywhere have been put on hold –although Friday’s better than expected US jobs data once again put Fed credit-tightening back on to the agenda. Disarray in Britain’s political ranks throws up a 21st century version of The Comedy of Errors.One important side effect: Theresa May, the quietly confident UK home secretary, is favourite to take over in September from departing Prime Minister David Cameron – joining Angela Merkel, Christine Lagarde and Janet Yellen in a march of female economic power.The July-August edition of the Bulletin analyses the ramifications of the EU’s biggest setback since it was set up in 1958. Niels Thygesen in Copenhagen, Philippe Lagayette in Paris, Stuart Mackintoshin Washington and Jacques Lafitte in Brussels provide views from Europe and the US.
With the Swiss franc once again a safe haven, Peter Warburton and Federico Corrado investigate the post-referendum challenge for Swiss monetary policy. Boris Vujcic, the Croatian central bank governor, outlines the navigational instruments central banks must deploy to safeguard independence. Ben Robinson describes how emerging market central banks, in particular the People’s Bank of China, are reacting to European upheavals.
Darrell Delamaide relates the reasons why the US Federal Reserve has decided once again to keep interest rates unchanged. Kevin L. Kliesen of the Federal Reserve Bank of St. Louis, ahead of OMFIF’s Main Meeting in St. Louis on 14-15 July, assesses the factors behind the US economy’s relative sluggishness. Peter A. Petri of the Peterson Institute for International Economics outlines how trade policy has become a battleground in the US election.
William Keegan provides a mournful book review of former UK Prime Minister Gordon Brown’s plea for a maintained British place in Europe. The OMFIF advisory board reminds us of battles to come: Greece’s fundamental problems are set to re-emerge in 2017.
Other highlights of the July-August 2016 edition:• A special correspondent in Warsaw assesses European Central Bank controls on non-monetary assets on the balance sheets of national central banks.• Caroline Butler outlines the potential ramifications of ‘Big Data’ for global risk management.
• Steven Bardy explores how regulators can better understand the opportunities and meet the challenges of blockchain.
• Patrick J. Schena explains the changes underway in Saudi Arabia’s sovereign fund.
• Harald Walkate extols the effect of impact investment on institutional holdings.
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