Fed and ECB to set rates as banking turmoil mounts

This article is an on-site version of our The Week Ahead newsletter. Sign up here to get the newsletter sent straight to your inbox every Sunday Hello and welcome to the working week. The Federal Reserve and the European Central Bank both meet to set rates this week against a backdrop of gloomier domestic data […]

The banking crisis is having a slow-burn impact on the economy

People walk by the New York Stock Exchange (NYSE) on February 14, 2023 in New York City. Spencer Platt | Getty Images A banking crisis that erupted less than two months ago now appears to be less a major broadside to the U.S. economy than a slow bleed that will seep its way through and […]

ECB policymakers are rethinking rate hikes after banking turmoil

A sign for the European Central Bank (ECB) outside the bank’s headquarters in Frankfurt, Germany, on Thursday, Feb. 2, 2023. Alex Kraus | Bloomberg | Getty Images European Central Bank policymakers are reconsidering the path of interest rate hikes in light of last month’s banking turmoil, but remain committed to reining in core inflation. Contagion […]

How the state could take control of the banking system

America’s banking conflagration may have died down, but the clean-up continues. Small and midsized banks have lost about $260bn in deposits this year. The Federal Reserve continues to plug much of the gap, having lent nearly $150bn to banks via its emergency schemes. Next year the Fed must decide whether to prolong them. By May […]

Stocks have shrugged off the banking turmoil. Haven’t they?

Bank failures are usually bad for business. A sickly banking system will lend less and at higher interest rates to companies in need of capital. A credit crunch will crimp economic growth and therefore profits. On occasion, a bad bank can blow up the financial system, causing a cascade of pain. Listen to this story.Enjoy […]

It’s the U.S., not Europe’s banking system that’s a concern, top economists say

A cargo barge on the River Rhine near the European Central Bank (ECB) headquarters at sunset in the financial district in Frankfurt, Germany, Bloomberg | Bloomberg | Getty Images Europe learned its lessons after the financial crisis and is now in a strong position to weather further stress in its banking system, several economists and […]

Politics, Not Markets, Makes Banking Unstable

Is fractional-reserve banking inherently unstable? Over at National Review, Edwin Burton, a visiting economics professor at the University of Virginia, argues that the “mismatch between the maturity of the source of funds and the maturity of the use of funds” creates a run-prone system. His argument, however, overlooks important contributions to monetary economics. Fragile banking […]

Will the recent banking chaos lead to an economic crash?

How quickly things change. A few weeks ago analysts were convinced the global economy was powering ahead. Now they worry about a deep recession caused by fallout from the collapse of Silicon Valley Bank (svb) and the rescue of Credit Suisse. “From no landing to hard landing”, as Torsten Slok, an economist at Apollo Global […]

Central banks announce dollar liquidity measures to ease banking crisis

The Federal Reserve and five other leading central banks have taken fresh measures to improve global access to dollar liquidity as financial markets reel from the turmoil hitting the banking sector. In a joint statement on Sunday, the central banks said that, from tomorrow, they would switch from weekly to daily auctions of dollars in […]