Category Archives: Central Banks

(NYT) Paul Volcker, at 91, Sees ‘a Hell of a Mess in Every Direction’

(NYT) The former Fed chairman, whose memoir will be published this month, had a feisty take on the state of politics and government during an interview.

Paul Volcker, pictured last October, said he had no intention of writing a book, but “I’m really worried about this governance thing.”CreditCreditMike Coppola/Getty Images for the National Committee on American Foreign Policy

Paul Volcker, wearing a blue sweatsuit and black dress socks, stretched out on a recliner in the den of his Upper East Side apartment on a Sunday afternoon. His lanky 6-foot-7 frame extended beyond the end of the chair’s leg rest. He added an ottoman to rest his feet.

“I’m not good,” said Mr. Volcker, 91, the former Federal Reserve chairman, who came to prominence after he used shockingly high interest rates to help end the runaway inflation of the late 1970s and early ’80s. Long one of finance’s wise men, he has been sick for several months.

But he would rather not talk about himself. Instead, Mr. Volcker wants to talk about the country, the economy and the government. And if he had seemed lethargic when I arrived, he turned lively in his laments: “We’re in a hell of a mess in every direction,” he said.

Hundreds of books surrounded Mr. Volcker — filling shelves and piled high on virtually every flat surface — as did pink pages of The Financial Times, folded into origami. “Respect for government, respect for the Supreme Court, respect for the president, it’s all gone,” he said. “Even respect for the Federal Reserve.

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“And it’s really bad. At least the military still has all the respect. But I don’t know, how can you run a democracy when nobody believes in the leadership of the country?”

Before Mr. Volcker fell ill, he finished his memoir, “Keeping at It: The Quest for Sound Money and Good Government.” The book was supposed to be published in late November, but given Mr. Volcker’s health, its publisher, PublicAffairs, a unit of Hachette, moved its release up to Oct. 30.

“I had no intention of writing a book, but there was something that kind of was irritating me,” he said. “I’m really worried about this governance thing.”

The book, which Mr. Volcker wrote with Christine Harper, editor in chief of Bloomberg Markets, is a telling memoir about a man who not only redefined the role of Fed chairman but, after the financial crisis, conceived of a namesake rule that eliminated some of the most blatant risk-taking by Wall Street banks. The Volcker Rule, which was part of the Dodd-Frank regulatory legislation, is being chipped away at by Republicans, which doesn’t sit well with him.

“There is no force on earth that can stand up effectively, year after year, against the thousands of individuals and hundreds of millions of dollars in the Washington swamp aimed at influencing the legislative and electoral process,” he wrote in the book.

Mr. Volcker with President Ronald Reagan in 1981. Three years later, Mr. Volcker wrote in his book, the president would pressure him not to raise interest rates.CreditScott Applewhite/Associated Press
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The memoir is at times a dishy tale of Mr. Volcker’s years in Washington. For example, while President Trump has complained in recent months about the Fed’s plan to raise interest rates, he isn’t the first to try to influence the independent Federal Reserve. Mr. Volcker recounts being summoned to meet with President Ronald Reagan and his chief of staff, James Baker, in the president’s library next to the Oval Office in 1984.

Reagan “didn’t say a word,” Mr. Volcker wrote. “Instead Baker delivered a message: ‘The president is ordering you not to raise interest rates before the election.’” Mr. Volcker wasn’t planning to raise rates at the time.

“I was stunned,” he wrote. “I later surmised that the library location had been chosen because, unlike the Oval Office, it probably lacked a taping system.”

The book is not limited to tales of the past, however. It addresses current policy, like the 2 percent inflation target that has become the goal of the Federal Reserve.

“I puzzle at the rationale,” he wrote. “A 2 percent target, or limit, was not in my textbook years ago. I know of no theoretical justification.”

With a laugh, he told me that he believed the policy was driven by fears of deflation. “And we haven’t had any deflation in this country for 90 years!”

But there is something more worrisome affecting policy than fear, he told me. Money.

Over the din of traffic outside an open window, Mr. Volcker hoarsely sounded an alarm on the power it has to shape our culture and our politics.

“The central issue is we’re developing into a plutocracy,” he told me. “We’ve got an enormous number of enormously rich people that have convinced themselves that they’re rich because they’re smart and constructive. And they don’t like government, and they don’t like to pay taxes.”

Washington, when he arrived, “was a city filled with bureaucrats,” he said. “It didn’t make them bad.” At the time, civil servants — like his father, the township manager of Teaneck, N.J. — were respected. “I grew up in a world in which good government was a good term,” he said.

But things have changed. Today, he said, Washington is overrun by lobbyists and think tanks. Mr. Volcker, who started a nonprofit to improve education for public service, contends that our educational system has been perverted by money.

Schools like the John F. Kennedy School of Government at Harvard and the Woodrow Wilson School of Public and International Affairs at Princeton, he said, have failed to educate a new generation of civil servants. He said they no longer taught governing but policy — a shift that he contended allowed them to hold forums and discussions with generals and under secretaries.

“Rich guys,” he said, “like to go.” He called it “hobnobbing wholesale.”

“They can argue war and peace and poverty and everything else,” he said. “But when you go to a school of public policy, you’re not learning how to run the goddamn government. You’re learning how to debate political issues.”

Unlike President Barack Obama, who invited Mr. Volcker to consult on economic and regulatory policy — and asked him if he would be willing to be Treasury secretary, he said — this White House hasn’t called him. Even so, he has met Mr. Trump twice, both times before he took office.

The first meeting was after Mr. Volcker left the Federal Reserve in 1987. “I was walking down the street, somebody calls out: ‘Hey, Paul! Hey, Paul!’ He comes running across the street and says, ‘Hi, I’m Donald Trump.’”

The other was an unsuccessful attempt by Mr. Volcker to get Mr. Trump to use “The Apprentice” to raise money for a charitable organization. “We had a very nice lunch, and he said, ‘Interesting idea,’ but put me off otherwise,” Mr. Volcker said.

Mr. Volcker is no great fan of the president, but he acknowledged that Mr. Trump had cannily recognized the economic worries of blue-collar workers. Mr. Trump “seized upon some issues that the elite had ignored,” he said. “I don’t think there’s any question about that, in kind of an erratic way, but there it is.”

He wondered how many lectures and presentations he had sat through with economists “telling us open markets are wonderful, everybody benefits from open markets.”

Eventually, Mr. Volcker said, someone in those lectures would always ask, “What about that poor manufacturer in my town?” But that concern was dismissed too easily, with talk of worker retraining or some other solution far easier said than done.


Mr. Volcker with President Barack Obama in 2009. Mr. Volcker said Mr. Obama had approached him about becoming Treasury secretary.CreditDoug Mills/The New York Times

Today, Mr. Volcker is already starting to worry about the next financial crisis. Asked about the stability of the banks, he said, “They’re in a stronger position than they were, but the honest answer is I don’t know how much they’re manipulating.”

That, he said, is the real challenge facing economic policymakers. “Everybody talks about monetary policy,” he said, “but the lesson of all this is we need better, stronger supervisory powers.”

Even as our conversation came to an end, Mr. Volcker looked as if he could keep talking for hours. I told him that, rather than look sick or depressed about the state of the world, he appeared energized. Or, I told him, that was at least the impression he left.

“Leave it that way,” he said.

(CNBC) Trump directly attacks Fed Chairman Powell, saying ‘Obama had zero’ interest rates


  • President Donald Trump attacked Fed Chairman Powell by name in an interview with the Wall Street Journal.
  • Trump accused Powell of endangering the U.S. economy by raising interest rates.
  • The U.S. president indicated that he sees the current performance of the economy as a competition between himself and President Barack Obama.

President Trump renews his criticism of the Fed

President Trump renews his criticism of the Fed  

President Donald Trump directly accused Federal Reserve Chairman Jerome Powell of endangering the U.S. economy by raising interest rates, according to The Wall Street Journal.

“I’m just saying this: I’m very unhappy with the Fed because Obama had zero interest rates,” Trump told the Journal on Tuesday. “Every time we do something great, he raises the interest rates.”

The president said Powell “almost looks like he’s happy raising interest rates,” but declined to elaborate, according to the Journal.

Trump acknowledged that the Fed is traditionally independent of political influence, the Journal reported, but he still pressed his attacks and appears to view the United States’ current economic performance as a competition between himself and President Barack Obama.

Why do we have the Fed?

Why do we have the Fed?  

As the central bank of the United States, the Federal Reserve’s mission is to set interest rates with the twin goals of maximizing employment and fighting inflation. The Fed is traditionally granted independence from presidential influence so that it can fulfill that so-called “dual mandate” without political interference.

The Fed has raised interest rates three times this year as the U.S. economy has heated up, and it is widely expected to hike again before year-end.

“How the hell do you compete with that? And Obama — remember this, it’s very important — Obama had zero interest,” the president told the Journal on Tuesday.

Obama took office after the Great Recession began in December 2007. The Federal Reserve at that time put historically low interest rates in place, and took other measures besides, in an effort to inject money into the faltering economy.

Contacted by CNBC, the Federal Reserve declined to comment.

The White House did not respond to a CNBC request for comment.

Trump: ‘Maybe’ I regret nominating Powell

Asked if he regrets nominating Powell to his Fed chairmanship, Trump told the Journal: “Too early to tell, but maybe.”

Powell has said neither he nor other Fed officials are letting Trump’s frequent complaints affect them.

“My focus is essentially on controlling the uncontrollable. We control what do,” Powell said in a question-and-answer session with Judy Woodruff of PBS this month.

Also this month, Trump complained that the Fed had “gone crazy” by tightening its monetary policy. His statement prompted International Monetary Fund Managing Director Christine Lagardeand others to come forward in defense of Powell and the Federal Reserve’s decision-making.

I wouldn’t associate J Powell with craziness, Christine Lagarde says

I wouldn’t associate Jay Powell with craziness, Christine Lagarde says  

“I would not associate Jay Powell with craziness. No, no, he comes across, and members of his board, as extremely serious, solid and certainly keen to base their decisions on actual information,” Lagarde said, speaking to CNBC in Bali, Indonesia.

(EUobserver) No plans for digital euro, Draghi says

(EUobserver) European Central Bank (ECB) chief Mario Draghi has said the eurozone was not looking to create a digital currency. “The ECB and the eurosystem currently have no plans to issue a central bank digital currency,” he said in a letter to an MEP on Friday, Reuters reports. Such technologies “require substantial further development” and there was no “concrete need” for a digital euro, he added.

(JN) Banco de Portugal gasta 17.448 euros em coletes de protecção balística

(JNO Banco de Portugal celebrou um contrato para a compra de coletes de protecção balística no valor superior a 17 mil euros. O contrato publicado no portal Base é omisso quanto à finalidade desta compra.

O Banco de Portugal decidiu comprar coletes de protecção balística no valor global de 17.448 euros, mais IVA.

contrato, assinado no dia 25 de Junho com a empresa Lasi – Electrónica, Comércio de Componentes e Sistemas Eléctricos e Electrónicos, foi divulgado no portal Base dos contratos públicos esta terça-feira, 4 de Setembro.

O Negócios tentou saber as razões que levaram o banco central a fazer esta compra, mas até ao momento não tivemos resposta.

No documento publicado no portal não se consegue perceber nem a finalidade desta compra nem a quantidade de coletes que foram adquiridos. Neste último caso, a informação consta num anexo que não foi tornado público.

Uma pesquisa por alguns sites na internet permite concluir que um colete de protecção balística pode custar entre 300 e 400 euros.

Segundo o contrato, a decisão desta compra foi tomada a 18 de Junho pela directora-adjunta do Departamento de Serviços de Apoio e os equipamentos devem ser entregues num prazo de dois meses, a contar da data da assinatura.

O documento revela ainda que “todas as comunicações e notificações” feitas pela empresa no âmbito da execução do contrato “devem ser remetidas para a Unidade de Segurança, Vigilância e Suporte Operacional da Área de Segurança do Departamento de Serviços de Apoio”.

(EuroNews) China central bank warns against illegal fund-raising by virtual currency, blockchain firms

(EuroNews) China central bank warns against illegal fund-raising by virtual currency, blockchain firms

China central bank warns against illegal fund-raising by virtual currency, blockchain firms
@ Copyright :

Petar Kujundzic(Reuters)

China’s central bank issued a warning on Friday on the risks of illegal fund-raising by companies marketing virtual currencies and blockchain technology.

In a post on its website, the People’s Bank of China said those so-called “financial innovation” activities are akin to ponzi schemes, adding that people should hold a rational attitude towards blockchain rather than put blind trust in it.

(Xinhua) Markets look to ECB forum in Portugal for rates clues

(Xinhua) — A three-day European Central Bank (ECB) conference gets underway in Portugal on Monday as markets seek further clues regarding future interest rates rises.

Last week the financial markets reacted sharply to the ECB’s announcement that it would keep interest rates low until the summer of 2019, while phasing out its quantitative easing program by the end of 2018.

Bond traders sold euro paper in favor of U.S. dollar notes, European equity markets climbed and the euro fell against all the major currencies.

Some analysts viewed movements to be a slight over-reaction and so any indication from the ECB regarding future rate hikes may trigger a correction.

The ECB Forum on Central Banking, entitled “Price and wage-setting in advance economies” will be held in Sintra, a town 29 km northwest of Lisbon.

Proceedings begin with a welcome dinner for delegates Monday evening. After dinner, ECB chief Mario Draghi will offer the forum’s “Opening Remarks”.

Draghi is not expected to say anything market-moving, but his “Introductory Speech” on Tuesday morning will be watched carefully.

However, Wednesday afternoon will perhaps provide the most significant moment with a roundtable “Policy Panel” discussion featuring Draghi, Jerome Powell, the Chairman of the U.S. Federal Reserve, and Haruhiko Kuroda, Governor of the Bank of Japan.

(EFE) BCE debate em Portugal sobre preços e salários nas economias avançadas


Dirigentes de instituições financeiras, economistas e académicos participam a partir desta segunda-feira no fórum anual que o Banco Central Europeu (BCE) realiza em Sintra (Portugal), que este ano aborda os preços e a fixação de salários nas economias avançadas.

O presidente do BCE, Mario Draghi, vai abrir o fórum no fim da tarde em Sintra, antes da recepção e o jantar de gala.

Na cerimónia inaugural também está previsto um discurso do ex-secretário do Tesouro americano Lawrence Summers sobre a política monetária num contexto de baixa inflação e baixos juros.

Draghi vai voltar a discursar na terça-feira com um discurso introdutório antes da primeira sessão, dedicada aos aspectos macroeconómicos dos preços e a fixação de salários e presidida pelo membro do comité executivo do BCE Peter Praet.

Esta sessão irá contar com uma conferência sobre desaceleração e inflação sensível aos ciclos de James H. Stock, da Universidade de Harvard, e outra sobre as expectativas em torno da inflação de Yuriy Gorodnichenko, da Universidade da Califórnia.

A primeira sessão vai acabar com um painel no qual participam o presidente da Reserva Federal de St. Louis, Jim Bullard; o governador do Banco Central da Irlanda, Philip Lane; a professora do Massachussets Institute of Tecnology (MIT) Kristin Forbes, e o economista francês Charles Wyplosz.

O fórum irá continuar na quarta-feira com uma sessão centrada no preço e a fixação de salários do ponto de vista microeconómico, presidida por outro membro do comité executivo do BCE, Sabine Lautenschläger.

A sessão começa com as conferências do professor Aviv Nevo, da Universidade da Pensilvânia, sobre medir a inflação nas economias modernas; e de Uta Schönberg, da University College London, sobre crescimento da produtividade e os salários.

O economista da Comissão Europeia Tommaso Valletti; o chefe de mercados trabalhistas inclusivos da Organização Internacional do Trabalho, Philippe Marcadent; o presidente da Organização Global do Trabalho, Klaus Zimmermann, e a professora Erica Groshen, da Universidade de Cornell, vão fechar a sessão com um debate.

A reunião finaliza na quarta-feira pela tarde com um painel que vai juntar Draghi com o presidente da Reserva Federal (Fed), Jerome Powell; o governador do Banco do Japão, Haruhiko Kuroda; e o do Banco da Reserva Australiana, Philip Lowe.

A cidade de Sintra recebe há cinco anos este fórum do BCE, que replica um modelo que a Fed realiza desde 1978 na cidade de Jackson Hole, no Kansas.

(ECO) BCE termina estímulos no final do ano. Reduz compras para metade a partir de setembro

(ECOBCE anunciou hoje que vai reduzir as compras de dívida pública na Zona Euro para 15 mil milhões de euros por mês a partir de setembro, se inflação estiver robusta. Estímulos terminam no final do ano.

Banco Central Europeu (BCE) vai reduzir as compras de dívida pública na Zona Euro de 30 mil milhões de euros para 15 mil milhões de euros por mês a partir de setembro, isto se a taxa de inflação estiver em linha com o seu objetivo. Depois disso, o programa de estímulos monetários terminará no final do ano. Já os juros vão continuar em mínimos históricos até ao verão do próximo ano.

As decisões foram conhecidas esta quinta-feira, após nova reunião de política monetária do banco central liderado por Mario Draghi, que teve lugar em Riga, Letónia.

Está em marcha a normalização da política monetária na Zona Euro, depois do programa agressivo de compras de dívida ter adquirido mais de dois biliões de euros em obrigações desde março de 2015. No fundo, o BCE vai deixar de comprar dívida já no início do próximo ano e, a partir daí, apenas os reinvestimentos (com dinheiro dos títulos que foram vencendo) vão ajudar a conter os juros na região, um cenário que já era esperado pelos analistas. .

Adicionalmente, apesar de ter mantido os juros nesta reunião, o BCE deixou uma nova orientação quanto ao rumo das taxas na região nos próximos tempos. E os juros em mínimos vão continuar durante mais um ano, antecipa o banco central.

“O Conselho de Governadores espera que as taxas diretoras do BCE continuem nos seus atuais níveis até, pelo menos, ao verão de 2019 e, em qualquer caso, durante o tempo que for necessário para assegurar que a evolução da inflação permaneça alinhada com as expectativas atuais de um ajustamento sustentado da trajetória”, afirma a autoridade em comunicado.

Atualmente, a taxa de juro de referência, que determina o custo do crédito na economia da Zona Euro, está nos 0,0%. Já as taxas de juro dos depósitos no banco central permaneceram nos -0,4%.

Daqui a pouco, quando foram 13h30 em Lisboa, Mario Draghi vai comparecer perante os jornalistas para explicar as decisões tomadas esta quinta-feira. E são vários os pontos de interesse para acompanhar. O italiano vai apresentar novas projeções para a evolução da economia do bloco do euro. Além disso, a instabilidade política em Itália também deverá merecer a atenção da imprensa. Mas o tema central deverá ser mesmo o programa de compras de dívida pública.

(Reuters) ECB to debate ending bond buys next week: Praet

(Reuters)The European Central Bank will debate next week whether to end bond purchases later this year, the bank’s chief economist said on Wednesday, a hawkish message seen preparing investors for another cut in stimulus.

Having revived growth with an unprecedented 2.55 trillion euro ($3 trillion) bond-buying scheme, ECB policymakers must decide when to end the purchases as the threat of deflation is long gone and the bloc is on its best growth run in a decade.

While policymakers are in broad agreement that the purchases should end this year, ECB President Mario Draghi has avoided any formal discussion about winding down the program, looking for more evidence that inflation is on a sustained rebound.

But comments from Peter Praet, a close Draghi ally, suggest that the ECB is pleased with the rise in inflation, raising the risk that a decision may come sooner rather than later.

“Next week, the Governing Council will have to assess whether progress so far has been sufficient to warrant a gradual unwinding of our net purchases,” he said in his last remarks before the ECB’s next policy meeting, noting that it will be a “judgment” call.

Euro zone bond yield rose and the euro hit a 10-day high against the dollar on comments from Praet, seen as one of the most dovish members of the Governing Council.

Some analysts took the comment to suggest a decision is coming at the June 14 meeting but others saw it as the starting gun in a debate that will likely culminate in a decision in July.

“We still don’t think that the ECB will easily give away flexibility and room for maneuver on QE in a situation in which downside risks to the economic outlook have increased and political risks could easily re-emerge,” ING economist Carsten Brzeski said.


Major policy changes have been taken in two steps in recent years with Draghi announcing preparations for a change in one meeting, then following through six weeks later.

The bank is also meeting in Riga, Latvia, making a major decision unlikely. External meetings away from the ECB’s Frankfurt headquarters, held just once a year, involve protocol functions with local officials, leaving less time for substantial work.

But Praet’s comments were a clear signal that when a decision is made, it is likely to be about gradually winding down the program as progress has been made in the ECB’s three inflation criteria.

“Signals showing the convergence of inflation toward our aim have been improving, and both the underlying strength in the euro area economy and the fact that such strength is increasingly affecting wage formation supports our confidence that inflation will reach a level of below, but close to, 2 percent over the medium term,” Praet said in Berlin.

“Waning market expectations of sizeable further expansions of our program have been accompanied by inflation expectations that are increasingly consistent with our aim,” Praet.

Inflation surged to 1.9 percent last month to hit the ECB’s target but most of the rise was due to higher energy prices. While the ECB tends to look past oil price shocks, it targets headline inflation suggesting that rising prices, even if fueled by those higher energy costs, support the case for curbing stimulus.

Several Governing Council members including two board members have recently argued for an end to the bond buys this year and Bundesbank President Jens Weidmann, among the most conservative rate setters, renewed his call on Wednesday to end the purchases.

The buys, now reduced to 30 billion euros a month, are due to run until the end of September but policymakers have long argued that they should be wound down gradually, over the course of several months.

+++ (JN) Bancos terão de ceder dados às fintech “a bem ou a mal”, diz BdP

(JNO Banco de Portugal tranquiliza as fintech, depois da Autoridade da Concorrência ter acusado uma “transposição lenta” da nova directiva e as barreiras à entrada ditadas por este atraso.

A nova directiva de pagamentos, a PSD 2, define que os clientes podem autorizar entidades terceiras a efectuar pagamentos, e portanto os bancos têm de ceder os dados dos clientes às fintech. A directora adjunta do Departamento de Sistemas de Pagamentos do Banco de Portugal, Maria Tereza Cavaco avisa: “Os bancos, se não derem a bem, vão ter de dar a mal. Porque se não derem a bem e não cumprirem os requisitos vão ter de simplesmente permitir o acesso ao seu homebanking”.

A SIBS está actualmente a construir uma plataforma (API) para facilitar a troca de informações entre os bancos e as fintech, mediante a autorização do cliente. Os bancos podem optar por esta via ou por criar as próprias soluções, mas a acção é obrigatória e sujeita a condições apertadas, nomeadamente no que toca ao tempo de resposta. “Aquilo que o regulador vai fazer depois é verificar se a API que a SIBS disponibiliza, ou outras soluções individualizadas, cumprem ou não todos os requisitos. Nós vamos monitorizar quando for a altura”, garante Maria Tereza Cavaco.

Estas declarações surgiram no âmbito da APED Retail Summit, uma conferência que juntou representantes do Banco de Portugal, a Autoridade da Concorrência, SIBS e Visa com os de duas fintech, Easypay e Aptoide.

A Autoridade da Concorrência já se tinha pronunciado quanto aos atrasos da transposição da directiva, alertando para as barreiras à entrada das fintech que este atraso impõe. A transposição estava marcada para 13 de Janeiro mas, quatro meses depois, continua por concluir. Para além disto, “a transposição não resolve todos os problemas. Há depois a implementação, e existirão com certeza desafios”, afirmou na mesma conferência Ana Sofia Rodrigues, a directora do Departamento de Estudos e Acompanhamento de Mercados da Autoridade da Concorrência.

O CEO da EasyPay, Sebastião de Lancastre, vocalizou as preocupações relativamente a este atraso. “Causa problemas às empresas que querem inovar”, queixa-se, e reage:”Os bancos vêem isto como ameaça. Vamos ver quem tem mais músculo”. Sebastião de Lancastre deu o exemplo da própria empresa, que, apesar de portuguesa, tem sede na Suíça. “Em Portugal não seria fácil” sedear-se devido às falhas de regulação, justifica. “Na Suíça temos uma relação muito próxima com o regulador”, que aproveita o feedback das empresas para moldar a regulação, assegura o CEO.

(Reuters) Bank of Portugal chief sees room for more bond-buying

(Reuters) The Bank of Portugal will keep buying the country’s sovereign debt, since the country is below its capital key limit for such purchases within the diminishing European Central bank bond-buying programme, Governor Carlos Costa said on Wednesday.

“What’s going to happen with the already announced reinvestment policy is, as we are below our capital key, we can manage supranational purchases versus sovereign, including by increasing the share of sovereign” debt purchases, Costa told a parliament committee, without specifying how much it could buy.

The ECB’s capital key weighting is based on the size of each country’s economy. It dictates limits on the amount of each country’s debt and individual bonds the euro system central banks can hold.

Due to a shortage of eligible Portuguese debt, the Bank of Portugal has been complementing its monthly purchases with supranational debt, issued by the European Stability Fund and its predecessors such as the European Financial Stability Facility.

“The Bank of Portugal will remain in the market and will optimize (its activities) in full accordance with the euro system rules,” Costa said, explaining that Portugal’s loan repayments to the International Monetary Fund in 2016-17 and some new bond issues have created more eligible national debt.

Cristina Casalinho, the head of state debt agency IGCP, said last week Portugal was still benefiting from monthly bond purchases by the European Central Bank of 400 million to 500 million euros as before it started gradually reducing overall purchases across the euro zone from 80 billion euros.

She said the country was likely to feel some implications when the total amount is reduced to 20 billion euros from 30 billion and later when the purchases peter out by the end of the year, but the impact should be smaller than in other economies.

Costa said, however, that the pace of buying did reduce over last year, when the bank had to buy more supranational debt. He would not say how much the ECB was buying now per month.

+++ O.P. (EXP) Ricardo Salgado e Morais Pires conhecem decisão de impugnação de coimas aplicadas pelo Banco de Portugal


Eu sei que esta opinião pessoal vai ser polémica.

Mas sei que é meu dever a publicitar.

Se há uma entidade em Portugal, mas que nem depende de Portugal, em que se não deve confiar, é o Banco de Portugal.

Basta ler as minhas Opiniões Pessoais e ver o que aconteceu nos últimos anos.

Embora não tenha a mais pequena simpatia nem compreensão pela ex administração do Banco Espírito Santo, tenho repulsa e indignação por qualquer condenação por parte do Banco de Portugal, que sempre soube de tudo, e que na realidade, se tal possível legalmente fosse,(mas não é, devido às imunidades decorrentes dos acordos da UE), devia era estar sentado no banco dos réus.

Basta aliás atentar ao comportamento do Banco de Portugal face à Comissão de Mercado de Valores Mobiliários no caso do Banco Espírito Santo (entre outros), para se perceber o que eu estou a dizer.

E para que não existam quaisquer dúvidas assino reproduzindo parte do Sub Menu About que consta deste site há anos:

“Francisco (Abouaf) de Curiel Marques Pereira 

Vice Chairman and CEO of the “Portuguese Association of Investment Companies – APC”, a Legal Entity, Member of The Advisory Board of the CMVM (FSA equivalent), Member of The Portuguese Government Advisory Council on Capital Markets “Conselho Nacional do Mercado de Valores Mobiliarios”, Presided by the Minister of Finance, and in consequence Advisor to The Government of The Portuguese Republic.”

(ExpressoO Tribunal de Supervisão, em Santarém, tem agendado para esta segunda-feira a leitura da sentença sobre as coimas aplicadas a Salgado e Morais Pires pelo BdP. Em causa está a comercialização de dívida da Espírito Santo Internacional junto de clientes.

O ex-presidente do BES, Ricardo Salgado, e o antigo administrador Amílcar Morais Pires conhecem esta segunda-feira a sentença do Tribunal da Supervisão ao pedido de impugnação das coimas de 4 milhões e de 600 mil euros, respetivamente, aplicadas em 2016 pelo Banco de Portugal.

Em causa no processo, que tem a leitura da sentença marcada para esta segunda-feira, estão as contraordenações aplicadas pelo Banco de Portugal (BdP), em agosto de 2016, nomeadamente por comercialização de títulos de dívida da Espírito Santo Internacional junto de clientes do Banco Espírito Santo (BES).

Coima de 3,5 milhões euros para Salgado e de 300 mil para Morais Pires

Nas alegações finais, proferidas em dezembro, o Ministério Público pediu a redução das coimas aplicadas a Ricardo Salgado, de 4 para 3,5 milhões de euros, e ao ex-administrador Amílcar Morais Pires, de 600 mil euros para 300 mil euros, por entender não ter ficado provado que este atuou com dolo, mas sim de forma negligente, e considerar alguns atenuantes em relação ao antigo presidente do BES.

Para a procuradora Edite Palma, Amílcar Morais Pires deve ser condenado ao pagamento de uma coima de 300 mil euros, suspensa em dois terços, e deve ser revogada a sanção acessória de inibição do exercício de cargos dirigentes no setor financeiro e bancário durante três anos, mantendo a obrigação de publicitar a eventual condenação.

No caso de Ricardo Salgado, a redução de 4 para 3,5 milhões de euros foi acompanhada do pedido de uma suspensão em um terço, mantendo-se a sanção acessória de inibição do exercício de cargos no setor durante 10 anos e de publicitação.

O mandatário do Banco de Portugal João Raposo não acompanhou o pedido de Edite Palma, reafirmando que a decisão sancionatória do supervisor “é justa”.

Já as defesas dos arguidos apontaram os valores das coimas aplicadas pelo BdP, que consideraram não ter comparação com qualquer moldura de processos crime.

Defesa de Salgado e Morais Pires invocam vícios processuais

O facto de a procuradora ter proposto ao Tribunal a “reorganização dos factos” constantes da acusação levou Raul Soares da Veiga, advogado de defesa de Amílcar Morais Pires, e os mandatários de Salgado a reafirmarem a existência de vícios processuais que, no seu entender, deverão levar a juíza Anabela Campos a declarar nula a decisão do BdP.

Alegaram ainda que os administradores que “tinham conhecimento de toda a dívida” ou foram absolvidos ou foram alvo de contraordenações mínimas, como foi o caso de José Maria Ricciardi (60 mil euros, suspensa em três quartos por cinco anos), que optou por pagar e desistiu do recurso.

O julgamento que se iniciou em 06 de março de 2017 no Tribunal da Concorrência, Regulação e Supervisão (TCRS), em Santarém, apreciou os pedidos de impugnação apresentados por Ricardo Salgado e Amílcar Pires no âmbito de um processo que começou por ter 18 arguidos (15 singulares e três coletivos), 13 dos quais alvo de coimas.

Ricardo Salgado foi condenado ao pagamento de 4 milhões de euros e ficou impedido de exercer cargos no setor por 10 anos como resultado da aplicação de cinco coimas por não implementação de sistemas de informação e comunicação adequados, por não implementação de um sistema de gestão de riscos sólido, eficaz e consistente, no que concerne à atividade de colocação de produtos emitidos por terceiros, por atos dolosos de gestão ruinosa, praticados em detrimento dos depositantes, investidores e demais credores, por prestação de falsas informações ao BdP, por violação das regras sobre conflitos de interesses.

A defesa de Ricardo Salgado – conduzida por Francisco Proença de Carvalho e Adriano Squilacce – retomou, nas alegações finais, muita da argumentação já constante do recurso, pondo em causa a atuação do BdP, que, no seu entender, “transformou arguidos em testemunhas”, numa forma de “delação premiada”, sem regras e “utilizada para responsabilizar” quem o supervisor “já tinha condenado”, em particular o governador Carlos Costa, que “três dias depois da abertura do processo já tinha decidido”.

Os advogados invocaram ainda o pedido da procuradora do Ministério Público, Edite Palma, para que o tribunal desconsidere o testemunho de José Castella (cujas declarações no TCRS foram extraídas para averiguação da atuação dos instrutores do processo que o inquiriram na fase administrativa), a que acrescentaram o pedido de igual tratamento para o depoimento de Francisco Machado da Cruz, a que chamaram a “testemunha rainha” do BdP.

Amílcar Morais Pires foi alvo de duas contraordenações por não implementação de sistemas de informação e comunicação adequados e não implementação de um sistema de gestão de riscos sólido, eficaz e consistente, no que concerne à atividade de colocação de produtos emitidos por terceiros.

(BBG) Portugal Wants Next ECB Head to Stick With Draghi’s Approach

(BBG) Portuguese Prime Minister Antonio Costa wants the European Central Bank to continue with Mario Draghi’s robust approach to policy after the ECB president steps down next year.

“We’d like someone who could continue the very good role played by Mr. Draghi, who was greatly responsible for saving the euro,” Costa said in an interview in London. “The nationality of the future president of the ECB is not the question. The question is what is the policy of the ECB? What is important is the continuity and the stability of Mr. Draghi’s approach in the future.”

Draghi’s eight-year term, which ends in October 2019, has so far been dominated by unprecedented monetary measures aimed at averting the breakup of the bloc and staving off deflation. Many of those steps have been criticized by Bundesbank President Jens Weidmann, who is currently viewed as the front-runner in the succession battle.

Portugal has been a beneficiary of the ECB’s stance, seeing borrowing costs tumble and unemployment drop to below the euro-area average. The nation’s economy expanded 2.7 percent last year, the fastest growth in almost two decades.

The next ECB head will be chosen by European governments in multiple rounds of horse-trading that will include the replacement of most of the Executive Board, the head of the Single Supervisory Mechanism and political positions such as the European Commission presidency.

+++ V.I. (BBG) Draghi Stares at Trade War Abyss as ECB Ponders Stimulus Outlook

(Bloomberg) — Mario Draghi’s progress toward a stimulus
exit is likely to stay slow for now, with inflation too low for
comfort and the global economy up against a trade-war-in-
U.S. tariffs and retaliation by Europe and others could
harm the outlook for the euro area, where exports have played a
huge role towing the economy out of its slump. That could add to
the European Central Bank president’s argument when he pushes
back against some ECB officials lobbying for a change to policy
If, contrary to expectations, more optimistic Governing
Council members do win some concessions at Thursday’s policy
meeting in Frankfurt, any language tweaks are expected to be
minor. The need for patience and persistence will also be
reflected in new growth and inflation forecasts, where any
revisions will also likely to be minimal.
So far, inflation has been a road block to scaling back
support. At only 1.2 percent in February, the rate remains far
from the ECB’s goal of just below 2 percent. Going forward,
consumer-price growth is set to pick-up gradually.
Draghi has expressed confidence that the economy’s
continued strength will eventually fuel price pressures.
Expansion last year was the strongest in a decade, with exports
rising the most in almost three years in the fourth quarter.
What Our Economists Say…“There’s not a whole lot more that
monetary policy can do to jump-start inflation apart from
intentionally overheating the economy — a step that few central
bankers would argue is a good idea.”– David Powell and Jamie
Murray, Bloomberg EconomicsFor more, see our EURO-AREA PREVIEW:
Draghi to Fend Off Calls for Major ECB Shift
Policy makers already identified increased trade
protectionism — as well as exchange-rate fluctuations — as
downside risks in January. Since then, gauges of market-expected
future volatility have eased.
At the same time, government-bond yields and the euro have
risen on the back of the region’s optimistic outlook. Growth in
the coming years is forecast to exceed the rate the economy can
sustain long-term, reducing economic slack.
Political uncertainty triggered by a strong showing of
anti-establishment parties in Italian elections has the
potential to damp prospects. Confidence measures have already
started to retreat from multi-year highs.
For Draghi, who has pledged to buy 30 billion euros ($37
billion) of assets until at least September and keep interest
rates unchanged until well past the end of purchases, that may
just be another reason to stay the course on stimulus for now.

(EUobserver) Eurogroup starts process to pick new ECB chiefs


  • Spain’s de Guindos, the Eurogroup’s longest-serving member, is favourite to become ECB vice-president (Photo: Council of the EU)

The future of the eurozone’s monetary policies will be partly shaped on Monday (19 February) when eurozone finance ministers give their preference on who should be the next vice-president of the European Central Bank (ECB).

The ministers have to choose between two candidates: their Spanish colleague Luis de Guindos and the governor of the Central Bank of Ireland Philip Lane.

  • Irish central bank chief Lane has the backing of MEPs (Photo:

“These are two excellent candidates,” Eurogroup president Mario Centeno said last week.

De Guindos, the only politician to run for the post, has been the favourite for many months.

As finance minister in the Spanish conservative government since 2011, he is the longest-serving member of the Eurogroup – and ran to be its president in 2015. He worked previously at Lehman Brothers bank and the PriceWaterhouseCoopers consultancy firm.

De Guindos has the public support of several countries, including Centeno’s Portugal. According to Spanish daily El Mundo, he is also supported by France – a crucial backing to secure the Eurogroup’s endorsement.

De Guindos’ competitor, Ireland’s Lane, benefited from a political momentum last week after a hearing at the European Parliament.

After listening to both candidates, MEPs from the economic and monetary affairs committee (Econ) found that Lane’s performance was “more convincing”.

“Some groups expressed reservations for minister De Guindos appointment,” the committee’s chairman, Roberto Gualtieri, said in a statement.

“Lane has shown himself to be a distinguished and proven economist. De Guindos, on the other hand, as a politician who would like … a top job at the ECB,” Green MEPs Sven Giegold noted, summarising the arguments about the two candidates.

In a tweet addressed to Centeno last week, socialist MEP Pervenche Beres, an influential member of Econ, called on the Eurogroup to “think twice about the good choice”.

I spoke today w/ @gualtierieurope who told me about an informal exchange of views w/ the 2 @ecb VP candidates. Next week, the ministers will discuss applications & make a formal recomendation to the European Council. I look forward to that

But don’t forget the @Europarl_FR will have to asses your choice before European Council will decide; for democracy, for credibility of the @ecb, please think twice about the good choice

EU officials point out however that the EU parliament’s need only to be consulted about the appointment. The final say will be for EU leaders, after their finance ministers issue a recommendation.

The recommendation will be adopted on Tuesday, when all 28 ministers meet. But Monday’s discussion between the eurozone’s 19 ministers is were the decision will be prepared.

The appointment of the new ECB vice president, in replacement to Portugal’s Vitor Constancio whose term ends in June, is the first move in a process to renew the top echelon of the ECB.

Opening door to Weidmann?

ECB president Mario Draghi will leave in November 2019, and many consider that if someone from the south is appointed ECB vice president, the next president will have to come from the north.

 That could leave the door open to Jens Weidmann, the head of the Bundesbank, Germany’s central bank, or an ally of him.

Weidmann is a staunch critic of Draghi’s monetary policies, with low interest rates and a massive assets buying programme to pump money into the economy.

Many fear that with De Guindos – who implemented Spain’s austerity policies – and Weidmann, the ECB would become less accommodating and more strict on fiscal policies.

Other consider that De Guindos’ appointment to the ECB executive board would create a precedent, and weaken’s the body’s independence towards eurozone governments.

In addition to the president and vice-president, three other members of the six-strong board will have to be replaced in the next two years, leaving several opportunities to reshape the ECB’s policies.

+++ O.P. (JE) Banco de Portugal sabia da falência da Rioforte e não alertou

Opinião Pessoal

 (Jornal Económico) Banco de Portugal sabia da falência da Rioforte e não alertou

…Pois é…

…E tomou todas as medidas erradas…

…Do ponto de vista regulatório o Grupo GES e o Banco Espirito Santo são um       escândalo com todas as letras.

…O Senhor Governador do Banco de Portugal pode vir dizer o que quiser, mas a     verdade é que o Banco de Portugal sabia da situação do GES e do BES mas nada fez e até acelerou a falência do Grupo GES ao proibir o BES de financiar as empresas do Grupo GES.

   Por isso e por outras razões eu sempre fui de opinião, e escrevi, que o Senhor Governador do Banco de Portugal não deveria ter sido reconduzido.

   Francisco (Abouaf) de Curiel Marques Pereira

(JE) A reportagem da SIC “À noite todos os gatos são pardos” revela que o regulador pediu uma análise às ‘holdings’ do Grupo Espírito Santo no terceiro trimestre de 2013.

O Banco de Portugal teve conhecimento do processo de falência da sociedade do ex-Grupo Espírito Santo (GES) Rioforte, não alertou para a insolvência e garantiu até que a empresa não tinha riscos, noticiou a estação de televisão SIC, numa reportagem emitida esta terça-feira, 6 de fevereiro.

reportagem do jornalista Pedro Coelho, intitulada “à noite todos os gatos são pardos” revela que o regulador bancário pediu uma análise à consultora PwC sobre as holdings do GES no terceiro trimestre de 2013 e, mais tarde, optou por não divulgar as conclusões do estudo feito.

A investigação da SIC, transmitida durante o “Jornal da Noite”, conta que não foi possível apurar qual a razão que terá levado o banco liderado por Carlos Costa a afirmar que a sociedade não financeira do grupo seria viável, ainda que a análise tivesse mostrado um capital positivo de 930 milhões de euros e, poucos meses mais tarde, um buraco de 945 milhões de euros.

Recentemente, o banco central informou que no decurso do quarto trimestre de 2017 o Banco de Portugal instaurou 23 processos de contraordenação e decidiu 108 processos.

Dos 108 processos de contraordenação decididos pelo supervisor, 77 foram sobre infrações de natureza comportamental, 23 respeitam a infrações de natureza prudencial, cinco têm que ver com infrações a deveres respeitantes à prevenção do branqueamento de capitais e do financiamento do terrorismo, dois versam sobre atividade financeira ilícita e um sobre infrações às regras em matéria de recirculação de numerário.

(JN) Fed aponta para subida de juros em Dezembro

(JNTal como o mercado tem antecipado, os responsáveis pela política monetária do banco central norte-americano ponderam aumentar os juros no final deste ano, revelam as actas da última reunião da Fed.

Fed aponta para subida de juros em Dezembro

Os membros do Comité Federal do Mercado Aberto (FOMC) abordaram, na última reunião de política monetária, a opção de a Reserva Federal dos EUA subir juros já em Dezembro, apesar de persistirem divisões devido ao facto de a meta de 2% da inflação ainda não ter sido alcançada.


Segundo as actas da última reunião da Fed, que decorreu a 31 de Outubro e 1 de Novembro, os responsáveis pela política monetária apontaram como provável uma subida dos juros de referência no curto prazo, tal como se antecipava – cumprindo assim o “calendário” de três aumentos este ano.

Com efeito, nessa reunião – em que a autoridade monetária norte-americana decidiu deixar inalteradas as taxas de juro – “muitos participantes consideraram que é quase certo que no curto prazo haverá uma nova subida da taxa dos fundos federais caso o panorama para o médio prazo se mantenha essencialmente inalterado”, revelam as actas. E o curto prazo pode ser já a reunião de 12 e 13 de Dezembro.

Recorde-se que a taxa de desemprego nos EUA está em mínimos de 16 anos, ao passo que a inflação está há vários meses em 1,7% – quanto a meta da Fed é de 2%.

As actas mostram que apesar de os responsáveis da autoridade liderada por Janet Yellen estarem confiantes no mercado laboral e no crescimento económico, há quem prefira esperar por sinais mais fortes de um aumento dos preços no consumidor. No entanto, a larga maioria aposta na subida dos juros para breve, até porque esse aumento tem vindo a ser bastante gradual.

Tal como para 2017, os responsáveis da Fed têm vindo a projectar mais três aumentos dos juros de referência no próximo ano, mas essa perspectiva pode ser questionada se os dados económicos não atenderem às expectativas do banco central.

No próximo dia 3 de Fevereiro, a Reserva Federal passará a ser presidida por Jerome Powell, um republicano de 64 anos escolhido pelo presidente Donald Trump para suceder a Janet Yellen no cargo.

(BBG) The ECB Needs an Inflation Plan, Just in Case

(BBG) Yes, the risks are remote right now. But investors seem unprepared, meaning calm could easily turn into chaos.

Risk management.

Photographer: Barcroft Media/Getty Images

Nearly three weeks after the European Central Bank halved the pace of its monetary stimulus to the euro zone economy, something strange is happening in the sovereign debt market.

Even as the ECB takes a little step back from quantitative easing, investors are continuing to pile into government bonds, particularly from some countries that were most affected by the crisis. The risk is that markets may be in for a rude awakening.

The cases of Italy, Spain and Portugal best represent this trend. The Italian 10-year bond yield has fallen by 20 basis points to 1.82 percent since the ECB announcement. The interest rates on similarly dated Portuguese and Spanish debt have decreased, respectively, by 30 and 11 basis points, to 1.95 percent and 1.52 percent. True, the ECB has extended purchases to September, and has left it open what it intends to do next. Even then, however, this does not look like the reaction to a monetary tightening.

Last week, in an interview in Rome, I asked Vitor Constancio, the ECB vice president, what he made of the reaction to the bank’s tapering announcement. He first interpreted this as a sign of confidence in the euro zone economy.

“Everyone is now expecting that growth will continue,” Constancio told me. “Only an extraordinary international event could derail the continuation of the current significant growth path. That changes prospects for everything, and it perhaps provides an explanation for why markets reacted the way they did.”

There is little doubt that the economic outlook for the currency area has improved substantially in recent months. The International Monetary Fund believes the euro zone will grow by 2.1 percent this year, up from 1.8 percent in 2016. All member states are taking part in the recovery, with differences in growth rates among the countries now much narrower than in the past. This makes sovereign debt in the euro zone periphery attractive, especially in a world of very low interest rates.

The trouble with this explanation is that it does not fit with what normally happens to the bond market in the event of a positive growth surprise. In theory, investors should demand higher interest rates to compensate for the possibility of higher inflation in the future. This is the opposite of what we have observed.

Constancio explains this apparent contradiction citing a favorite argument for central bankers: the “mystery” of missing inflation. In the euro zone, prices rose by 1.4 percent in the year to October, less than the ECB’s target of just below 2 percent. He says this is not just a euro zone phenomenon, but one that is also going on in the U.S. In fact, what is happening across the Atlantic may well be spilling over to Europe.

“In the markets, what prevails, also in the U.S., is that there is a very subdued view about future inflation,” Constancio said. “That has also happened in our markets, with yields going down.”  He added:

We also saw that the slope of the yield curve in the U.S. touched the lowest level since many years ago. Markets don’t expect in the short run inflation and nominal growth going up significantly, and that explains their reaction. That’s the way they see the future. It is important for us to really take that into consideration.

How exactly should the ECB take this into consideration, though? The central bank obviously sets its monetary policy on the basis of what it believes will happen to inflation, not to the bond market. Still, so far, the ECB has been skillful in communicating its intentions to investors: This has avoided a disorderly reaction, even as the central bank was taking a first step back from quantitative easing.

But what would happen were inflation to begin to surprise on the upside? Right now, investors seem unprepared, meaning calm could easily turn into chaos. However remote this risk may seem at the moment, the ECB should start thinking about how to deal with it. Sudden shifts in monetary policy are the hardest to communicate.

(BBG) Bonds Slump From Germany to Portugal on Fears Rally Overdone

(BBG) Aberdeen’s Hickmore Says Yield Curve Hardest to Get Right

European government bonds slumped, snapping a rally started after the European Central Bank’s meeting two weeks ago, as some investors judged recent gains excessive.

German and Italian securities fell along with their core and peripheral peers in Thursday’s selloff, with yields rising from lows seen after the ECB’s Oct. 26 decision. The yield on 10-year bunds rebounded from an eight-week low touched on Wednesday amid concern notes had fallen too far, according to John Wraith, a strategist in London at UBS Group AG. He sees the rate on bunds rising to 0.9 percent by end-2018.

The bond market is having “second thoughts after the ‘carry enthusiasm’ following the ECB decision,” said Arne Lohmann Rasmussen, head of fixed income research in Cophenhagen at Danske Bank A/S. “We have had four weeks with strong positive net cash flow and that is coming to an end now.”

European bonds rallied across the board in the past two weeks after the ECB, which reduced its asset purchases last month, pledged to step up or even extend debt buying if needed. Fading political risks in Spain and Italy added to the bullish sentiment. Italy’s 10-year yields dropped to the lowest in a year this week, while similar rates in Portugal fell below 2 percent for the first time in more than two years.

Ten-year yields in Germany rose six basis points to 0.38 percent as of 4:36 p.m. in London. Those in Portugal and Italy climbed four basis points to 2.05 percent and seven basis points to 1.82 percent, respectively.

(P-S) Central Banks in the Dock – BARRY EICHENGREEN

(P-S) Today, central banks are under attack for missing their inflation targets, failing to maintain financial stability or restore it in transparent ways, and ignoring the global repercussions of their policies. But compromising central bank independence in order to enhance political accountability would be to throw the baby out with the bathwater.

LONDON – On November 11, 1997, the Bank of England took a big step toward independence, courtesy of the second reading in the House of Commons of a bill amending the Bank Act of 1946. The bill gave legislative affirmation to the decision, taken by then-Chancellor of the Exchequer Gordon Brown, to free central bank operations from governmental control. This was a landmark event for an institution that had been under the yoke of government for a half-century. It symbolized how the need for central bank independence had become conventional wisdom.

Now, however, this wisdom is being questioned, and not just in the United Kingdom. So long as inflation was the real and present danger, it made sense to delegate monetary policy to conservative central bankers insulated from pressure to finance government budget deficits. Today, in contrast, the problem is the opposite, namely the inability of central banks to raise inflation to target levels.

To achieve this, it is necessary for monetary and fiscal policymakers to work together, including by allowing the central bank, in extremis, to monetize budget deficits. But when it comes to cooperating with the fiscal authorities, central bank independence is a hindrance, not a help.

Independence was also easier to defend when central bankers’ task was limited to keeping inflation low and stable. Given this narrow remit, the distributional consequences of central banks’ decisions were limited. It was easier, moreover, to explain how a central bank’s policy instruments were linked to its politically mandated targets.

But after the global financial crisis highlighted the dangers of consigning monetary and fiscal policy to separate silos, central banks acquired additional responsibilities. Deciding whether or not to rescue a specific financial institution, whether to ensure systemic stability or for other reasons, has visible consequences for individual investors.

The same is true of unconventional interventions in markets for corporate bonds and mortgage-backed securities. Not surprisingly, the notion of independence for central banks that visibly aided specific financial institutions – and this at a time when society as a whole was under unprecedented economic stress – quickly became politically toxic.

Independence is even more problematic in an age when the cross-border spillovers of national monetary policies have become powerful. Those spillovers make it important for central banks to take into account the impact of their policies on foreign countries and the global system. But the pursuit of global objectives is difficult, bordering on the impossible, when central banks function under the kind of narrow, domestically focused mandates that independence requires.

Today, central banks are under attack for all of these reasons: for missing their inflation targets, for failing to maintain financial stability, for failing to restore stability in transparent ways, and for not adequately taking into account the global repercussions of their policies. Dissatisfied by their performance, politicians are seeking to reassert control.

Thus, we see the Bank of Italy attacked for its handling of the country’s banking crisis. We hear the Bank of England criticized for voicing worries about the macroeconomic repercussions of Brexit. We encounter speculation that US President Donald Trump is intent on packing the Federal Reserve Board with politically compliant appointees.

But compromising central bank independence in order to enhance political accountability would be to throw the baby out with the bathwater. Monetary policy is complex and technical. Returning control to politicians is no more prudent than handing them the keys to a country’s nuclear power plants.

Some will say that the way for central banks to ensure their independence is to abandon macroprudential and microprudential policies and foreswear unconventional interventions in securities markets. But a key lesson of the crisis is that macroeconomic and financial policies are closely intertwined, and that their coordination is most effective when the two tasks are housed in the same institution, if run by separate committees. Given the prevailing low level of interest rates, moreover, it is all but certain, come another crisis, that unconventional policies will be back.

What central banks can do to head off threats to their independence is become more transparent. They can announce the votes of individual board members on all policy-relevant matters and release minutes without undue delay. They can hold more press conferences and be less platitudinous in explaining their policies. They can avoid pontificating on questions remote from their mandates. They can acknowledge the right of politicians to define the goals the central bank is tasked with achieving.

And to shape the views of those politicians, they can better explain why cooperation with fiscal authorities and foreign central banks is in the public interest. They can publish more detailed financial accounts, including on their individual security transactions and counterparties.

Above all, they can avoid intervening in parliamentary politics, as the European Central Bank did when it hastened the fall of Silvio Berlusconi’s government in Italy in 2011. Then they can keep their heads down and hope for the best.