Zhou Xiaochuan, Governor of the People’s Bank of China said this week that the International Monetary Fund’s Special Drawing Right should replace the dollar as the world’s main currency. The political reasons for his proposal are clear, its merits rather less so. Could the world economy work better with a global central bank, whether in […]

The Federal Open Market Committee meeting on March 17-18, if it achieved nothing else, made one thing abundantly clear: even after all the damage that has been caused to the global economy, the Fed neither accepts responsibility for its misdeeds, nor has any intention of modifying its errant behavior. A private sector institution that behaved […]

US treasury secretary Tim Geithner called last week for the lending power of the International Monetary Fund to be trebled. For those of us who were hoping that institution would expire of long-term neglect, this was a disquieting development. Can it be that the Bretton Woods institutions, which have played a largely pointless and occasionally […]

The political response to this economic downturn has differed from previous responses to downturns in a number of ways, the most economically significant of which lies in the extent to which failure has been subsidized. Counterproductive economic pathologies have been encouraged, financial structures that endangered global prosperity have been bailed out and trillions of dollars […]

Wall Street over the last generation has been a prolific generator of casinos, in which the dealing community can make a very nice living indeed by providing investment and “hedging” services to outside investors. Of all these casinos, the credit default swaps market has been among the most lucrative. As the credit crisis has unfolded, […]