Brexit should not lead to a repeat of the financial crisis of 2007-2008. So argue Pictet analysts and economists in the July issue of Perspectives. Central banks are better prepared and banks are less leveraged. In the last resort, the European Central Bank can be expected to step in again should financial stress noticeably increase […]
Will Knut Wicksell be proved right? The Swede’s theories include the notion that there is a ‘natural’ level of interest rates, consistent with the economy operating at its full potential without overheating. But the actions of central banks have forced interest rates to artificially low levels in recent times, well below their ‘natural’ levels. If […]
Central banks contributed to halting the financial crisis (starting with the US Federal Reserve’s first quantitative easing package, launched in late 2008), with successive rate cuts helping companies and households in the West to deleverage. The Bank of Japan (BoJ) and European Central Bank (ECB) followed with aggressive policies at a later stage, when the […]
Growth is gradually normalising as cyclical weaknesses abate, and we expect fairly healthy rates of economic growth in developed economies in 2016. Moreover, we believe that an innovation shock could boost growth in the coming years — and indeed that a technological innovation shock has already begun, although its effects are still concentrated on certain sectors for now.
Since 2009, major central banks such as the US Federal Reserve, the European Central Bank (ECB), the Bank of Japan (BoJ) and others have largely determined the trends in the major asset classes of both emerging and developed countries: equities, sovereign and corporate bonds, and currencies. Investors found their guiding light in the central banks. […]
The Vix, a widely used measure of equity-market volatility, was in a systemic risk regime for 15 days this year, compared with just two days in 2014 and none at all in 2013, as shown by the chart below. This year’s experience of volatility is still not extensive in a historical comparison, but it still […]
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