Biden borrows from Eisenhower’s playbook, ECB needs to rethink market neutrality, and more
Latest opinion and analysis from OMFIF around the world
5-9 April 2021, Vol.12 Ed.14
Biden borrows from Eisenhower’s playbook:
Without resting on his laurels, after exceeding his vaccination target and passing a $1.9tn stimulus, President Joe Biden has proposed an infrastructure spending package totalling more than $2tn. This is not so much from the Roosevelt playbook as it is from Eisenhower’s. His bill will not just repair and restore US infrastructure, it will make it fit for the much-needed green economy. That would yield a sustained boom in the US and global economies, writes Meghnad Desai.
ECB needs to rethink market neutrality: Market neutrality in the form of a market capitalisation weighted benchmark – as used in the ECB’s corporate sector purchase programmes – may not be appropriate. Market failures that distort relative prices may be a reason to use other concepts of market neutrality that better reflect climate-related risks and externalities, writes Olaf Sleijpen.
Health check: This volume of the journal comes one year on from when most countries introduced lockdown measures to contain the spread of Covid-19. Two lessons stand out. First, countries that followed the science have generally been assessed to have better weathered the pandemic shock. Second, preparing for tail risks and acting early helps to contain the virus and its consequences.
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Asset and risk management: OMFIF convenes a group of economic experts and asset managers to summarise economic and financial developments and discuss the outlook for public sector investment management in a post-Covid environment. Participants discuss the global recovery, efficacy of monetary policy and transitioning to a low carbon economy.
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Designing financial systems for a healthy planet: As we lose natural diversity, we restrict our opportunity to harness nature-based solutions to tackle climate change. This presents an existential threat to the global economy. The good news is that the financial sector is starting to respond to climate-related risks, write Margaret Kuhlow and Thomas Vellacott.