Does central bank capital matter? Remote working and Covid-19, and more
THE WEEKEND REVIEW – OMFIF
Latest opinion and analysis from OMFIF around the world
25-29 January 2021, Vol.12 Ed.4
Most-Read Commentary
Does central bank capital matter?: This new series on central bank accounting and capital policy looks at how national central bank and European Central Bank holdings of public sector debt are treated differently.The tension between central bank independence, profit and loss accounting and the structure of the Eurosystem has come into the spotlight. This is due to the rise of the European Central Bank’s balance sheet and its growing exposure to often negative-yielding sovereign bonds, write Danae Kyriakopoulou and Pierre Ortlieb.
Podcast Remote working and Covid-19: Susan Lund, partner at McKinsey & Company, and Carl Benedikt Frey, Oxford Martin Citi fellow at the University of Oxford, join Ellie Groves, OMFIF’s deputy head of programming and Europe manager, to discuss the impact of Covid-19 in accelerating the shift to remote working, as well as the barriers encountered by governments and businesses. Listen.
Outlook 2021 Sovereign debt can boost euro: The dollar’s position as the world’s dominant currency is being challenged once again. The euro began its life as a reserve currency in 1999 claiming about 18% of global reserves, peaking at 28% before surrendering its gains to other currencies. Two new EU programmes are building the foundation for it to challenge again, writes Frank Scheidig. Read more.
Commentary Fed should speak out: As the US experiences a slowdown in economic recovery, the FOMC firmly adhered to the status quo in a two-day meeting on Wednesday. This caution could lead to a lull lasting months. But instead of describing risks, the Fed should forcefully speak out, urging a strengthening of US macroprudential policies, writes Mark Sobel. Read more.
Chart of the week Hedge funds v. the people: Shares in GameStop, a US video game retailer, ended trading on 27 January up 1,744% for the month – growing to around $350 from under $20. Hedge funds in the US are shorting the stock, but this seemingly common strategy was thwarted by groups on Reddit and Twitter who rallied together to purchase GameStop shares, spiking the price. Read more.
