Bank busts and regulation

Stock markets are jumping back up today.  It seems that financial investors think the monetary authorities and banking supervisors have got the banking crisis under control.  That could be wishful thinking. The banking crisis of 2023 is not over yet.  The Californian ‘tech’ bank Silicon Valley (SVB) that went bust last week has been taken

Moral hazard or creative destruction?

As I write, US regional banks stock and bond prices are diving.  And a major international Swiss bank, Credit Suisse, is close to bankruptcy.  A financial crisis not seen since the global financial crash of 2008 appears to be unfolding.  What will be the response of the monetary and financial authorities? Back in 1928, the

Monetary tightening, inflation and bank failures

Last week, US Fed Chair Jay Powell gave testimony to the US Congress on inflation and Fed monetary policy.  He spooked financial markets when he appeared to say that the latest data on the economy would probably require further interest-rate hikes and at a faster pace.  Powell argued that although the headline inflation rate had

SVB: from the valley to the chasm

On Friday, Californian bank Silicon Valley Bank (SVB) became the largest bank to fail since the 2008 financial crisis.  In a sudden collapse that shocked financial markets, it left billions of dollars belonging to companies and investors stranded.  SVB took deposits from and made loans to companies in the heartland of America’s tech sector.  The

China and the ‘experts’

The annual National People’s Congress kicked off today with outgoing premier Li Keqiang announcing a 5% real GDP growth target, down from 5.5% before.  The priority, said Li, was the economy, but even so defence expenditure was to rise by 7.2% in 2023.  Li set a target for China’s budget deficit this year at 3%

The big con

Mariana Mazzucato and Rosie Collington are authors of The Big Con: How the Consulting Industry Weakens our Businesses, Infantilises our Governments and Warps our Economies.  They launched their book with big fanfare in London, charging £30 a person to attend the live event. Mazzucato has built up a big reputation, scanning from the left in

EEA 2: Long waves, profit curves, imperialism and socialist planning

There were some interesting papers presented in the URPE sessions at the Eastern Economics Association conference that ended last weekend (see my previous post).  I cannot cover them all but just a few papers that were kindly sent to me by their authors.  First, long waves in capitalist accumulation.  Professor Jason Hecht of Ramp College

EEA1 – the causes of current inflation

The Eastern Economics Association (EEA) held their annual conference last weekend.  It’s not as large as the huge annual conference of American Economics Association (ASSA), but the EEA does incorporate much more heterodox and radical economic presentations than ASSA.  There were hundreds of papers presented.  I shall concentrate on just a few papers from the

Nigeria: capitalist failure

Tomorrow the people of the most populous country in Africa go to the polls to elect a new President.  Nigeria is the biggest economy in Africa and home to at least 220m people. Its population will nearly double in the next 25 years to 400m, surpassing the US as the world’s third most populated country.

Russia-Ukraine: one year of war – the economics

It’s just a year since the Russian invasion of Ukraine.  I am not going to discuss the politics of this war in this post.  There are plenty of sources for debate on this.  Instead, I want to look at the economic consequences of the war for both Ukraine and Russia. Let’s start with Ukraine.  Back