Central banks

What are Central Banks?

 

Central banks are entrusted with the task of controlling a nation’s inflation, interest rates and price stability; ultimately preventing the economy from failing.

 

These institutions inform and implement monetary policy, with the aim of controlling money production and distribution to better unemployment rates and economic growth. Monetary policy is primarily executed by the central banks through management of interest rates and bank reserves (deciding the amount of money banks can lend and retain at any one time). The former is hugely important as the cost of borrowing and lending money impacts loans, investment and economic strength.

 

A central bank will also act as an emergency resource for commercial banks when they need a loan - another economic safety-net for the country.

 

Central Bank News from LGIM

 

As one of the UK’s leading investment managers, LGIM offers knowledge and experience that can bring real benefit to investors looking to understand economics, policy and politics.

 

Find the latest research on future path of central bank policies around the world, from inflation control to central bank interest rates.

 

Our Asset Allocation team includes dedicated and accomplished US, European and Global economists, whose focus is to assess the macroeconomic environment across the developed world. This includes researching government policy, emerging political trends, as well as the outlook for economic growth and inflation. Our economists then work with our team of strategists and portfolio managers to translate their views into what this means at a portfolio level.

Strategy

Eureka: the Archimedes principle

Is there an Archimedes principle at play in financial markets? As central banks withdraw liquidity by shrinking their asset holdings, does it inevitably imply bad news for investors? We look to theoretical, historical and contemporary clues to find out.

Read more

Economics

Don't shock me now

I'm not sure exactly why Queen's "Don't stop me now" has been stuck in my head...something to do with football and wishing not to get knocked out maybe...we were having such a good time! Anyway, as I say in this Sky News interview on the Ian King Show, only a big shock would stop the Bank of England from hiking in August. I also discuss the merits of the new monthly GDP data.

Read more

Macrobites

Monetary mayhem in the policy petri dish

The Hong Kong dollar is tied closely to the US dollar. Monetary policy made in Washington therefore applies directly in Wan Chai and Kowloon. In recent months, the Hong Kong Monetary Authority has been obliged to shrink its balance sheet rapidly to maintain the fixed exchange rate. This serves as a real-life policy experiment of the effects of quantitative tightening in a financial system. So far, nothing has blown up, but Hong Kong equities have been under pressure as financial conditions have tightened.

Read more

Economics

The ECB’s Italian Job

“We trust that the government will take all the appropriate actions” – Jean-Claude Trichet. Mario Draghi. That was the sign-off for the now infamous ECB letter sent to Silvio Berlusconi’s government during the height of the European sovereign debt crisis. Nearly seven years on, Italy has once again experienced financial market turmoil and the ECB this week will no doubt be asked many questions about the situation.

Read more

Strategy

Five Star Radio

The new political paradigm has thrown up another populist government in Italy, threatening the European project. Meanwhile in the US, could "Operation Twist Again" come into play as investors stress about ever-flatter yield curves?

Read more

Economics

Is Carney getting cold feet about hiking?

Earlier this year, the UK economy appeared to be warming up nicely, and a May rate hike was on the cards. But has March’s cold snap changed all this?

Read more

Economics

Where are the inflation hawks?

US core inflation is on the verge of returning to target, but there are widespread expectations that it will stabilise there over the next few years. How confident should investors be in this outlook?

Read more

All posts: 65

Page No: 1

NoOfPages: 10

All posts: /tags/central-banks/?page=2