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Commentary

Tue 23 Apr 2019 / Global

Gender balance in central banks

One of the oft-cited arguments used to convince organisations to commit to gender diversity is how it benefits decision-making. Applying such analysis to central banks is tricky, if not impossible, chiefly due to the lack of a robust sample to conduct econometrics. Still, anecdotal evidence and views from central bankers highlight the benefits of diversity in helping to reduce the likelihood of 'groupthink'. Strategies to promote women in finance likewise help promote role models that can change outdated notions about women's abilities.

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Thu 18 Apr 2019 / North America

Fed running out of monetary ammunition

It is clear that President Donald Trump's administration is not concerned with whether the US will have enough resources left to fight the next downturn. The president's quest for an ultra-easy monetary policy at this late stage in the economic cycle might cause the US economy to overheat and thereby rekindle inflation. Moreover, it would leave the Federal Reserve with scant ammunition to fight the next recession. With the Fed funds rate already as low as 2.25%-2.5%, further cuts would leave the central bank with limited room to slash rates.

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Wed 17 Apr 2019 / Europe

Brexit delay may mean end of May

The agreement struck by the EU on the UK's Article 50 negotiating period was a difficult compromise, with few predicting the six-month extension. Theoretically, that should be long enough to facilitate change, if the political will exists. But one major reason to believe October could be too early is that the UK might have a new prime minister by then. Theresa May told Conservative MPs that she would step aside if her deal was passed, having also said in fairly strong terms that she couldn't stay if Article 50 was extended beyond June.

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Tue 16 Apr 2019 / Global

Belt and Road delivers crucial capital

China's Belt and Road initiative provides access to capital for connected emerging markets that have not had the necessary investment grade ratings to tap international bond markets. Infrastructure, the core of Belt and Road funding, is and has been the engine of growth for most economies. But these emerging markets have never had the opportunity to attract offshore investors who require ratings dictated by their corporate policies. Nor do those investors have a high enough risk appetite to venture into uncharted emerging markets.

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Thu 11 Apr 2019 / Latin America Caribbean,Middle East,Global

'Submerging markets' pose global threat

Renewed currency weakness in Argentina and Turkey underlines the risks that emerging markets, or rather 'submerging markets', could pose to the global economic recovery. Fortunately, given their relatively small size, the Argentine and Turkish economies cannot by themselves constitute a significant threat. The same, however, might not be said of Brazil and Mexico. Both these countries appear vulnerable to crisis in the light of the seemingly shaky economic stewardship of their respective new presidents.

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Wed 10 Apr 2019 / Europe

France, Germany and the future of Europe

Europe continues to be prisoner to a concept of sovereignty developed for its past. Setting European sovereignty against national sovereignty is a mistake that would come at a high price. In the middle are France and Germany. Both are aware that the EU must decide, after the forthcoming elections to the European Parliament, how to face up to the threat of disaggregation. The EU needs institutional capacity-building in the centre, but it also needs member states with their own institutional strength. A new world requires new ideas.

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Tue 9 Apr 2019 / Asia Pacific,Global

Beijing ready to 'China-ise' the West

The West is slowly getting over the idea that China will 'westernise'. The illusion that it is only a matter of time before the population's rising wealth will deprive the Chinese Communist Party of the power it wields is dissipating. China is enjoying growing wealth because the authorities have set loose beneficial market forces. Many western firms have profited from this, and many more crave China's custom. This means Beijing can now take the route of 'China-ising' the West, including by promoting wider use of the renminbi.

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Fri 5 Apr 2019 / Asia Pacific

UK-Singapore ties after Brexit

A panel discussion on 3 April in Singapore, organised by the British Chamber of Commerce, was convened to discuss the probable repercussions of the delay and the implications of Brexit for Asian stakeholders. Speakers at the panel were positive about the future of the Singapore-UK partnership, writes Adam Cotter.

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Thu 4 Apr 2019

Clash over Fed policy escalates

The reversal of monetary policy by Federal Reserve Chair Jay Powell and his troops to be super-accommodative has done little to quell the pressure on US policy-makers. In fact, it seems to have escalated the war on Fed policy; investors and President Donald Trump are pushing for a rate cut when the Federal Open Market Committee has only recently abandoned its path of gradual rate rises. Fed policy-makers must accept the consequences of their transparency. With critics like Stephen Moore poised to join the board, that will not get any easier.

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Wed 3 Apr 2019 / Europe

Time for a new European green bank

In Paris, a group of economists and politicians including former prime ministers, came up with the idea of using a new bank and the private sector to encourage investment in climate change projects. They urged President Emmanuel Macron to make the creation of a European Bank for carbon-free economic investment a top EU policy goal. Just moving to electric cars or equipping homes with better insulation and double-glazing constitute multi-billion-pound projects.

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