Conditioning and the Bank of England’s credibility problem

30 June 2023EconomicsBank of England, central banking, Federal Reserve, inflation, interest rate swapsNick Dunbar

The Bank of England uses forward rates derived from the swap market to forecast future base rates. This approach is flawed, and has contributed to the Bank’s loss of credibility in the fight against inflation.

The End of Alchemy: Money, Banking and the Future of the Global Economy

31 May 2016Book ReviewsBank of England, book reviews, central banking, economicsNick Dunbar

A review of Mervyn King’s book

Stress Test: Reflections on Financial Crises

23 September 2014Articles, Book Reviewscentral bankingNick Dunbar

by Timothy F Geithner (Random House 2014) If you had perfect foresight and were going to pick the best regulator or policymaker capable of dealing with the global financial crisis and its aftermath, whom would you choose? You'd probably want someone with a track record of dealing directly with crises, perhaps in emerging markets, and…

Déjà Vu All Over Again

8 August 2011Articlescentral banking, eurozone, sovereign debtNick Dunbar

Are we on the verge of another Lehman weekend? The crisis of September 2008 unfolded in several stages: 1) a long bubble in subprime and credit markets in general, in which Lehman and other banks profited from by increasing their balance sheet leverage, 2) following a realisation that subprime was a haven of fraudulent lending,…