Should the central banks kill the bull markets?
Article Abstract:
The only policy instrument at the disposal of central bankers is to raise or lower short-term interest rates. If they try to use this instrument to fulfill more than one objective, it is quite likely that problems will emerge. In the case of asset prices, the main difficulty is deciding whether the fundamentals on which the rapid rise in asset prices are based are sound. There are currently few clear indications that the US stock market is experiencing an asset price bubble, and this makes it hard to justify raising interest rates, particularly when there are no other reasons for doing so.
Publication Name: The Independent
Subject: Retail industry
ISSN: 0951-9467
Year: 1998
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ECB asserts its independence
Article Abstract:
The 17 central bankers on the governing council of the European Central Bank are already facing challenges from governments of the left to their role as custodians of the European single currency. They are particularly clashing with new German Finance Minister Oskar Lafontaine, who has made it clear that he feels that interest rates should be reduced in order to tackle unemployment. Central bankers are keen to show that they will not bow to pressure, but it is uncertain whether they will be willing in the longer term to treat politicians with contempt.
Publication Name: The Independent
Subject: Retail industry
ISSN: 0951-9467
Year: 1998
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ECB gets off to a very strong start
Article Abstract:
The European Central Bank (ECB) has already shown that it is willing to stand firm against pressure from politicians to reduce interest rates. It has also stated that it will not deliberately leave interest rates too high simply in order to exercise power over politicians. The ECB is sufficiently confident simply to follow the best policy, as reflected in its decision to order outgoing national central banks to cut all interest rates in the European monetary zone to 3%.
Publication Name: The Independent
Subject: Retail industry
ISSN: 0951-9467
Year: 1998
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