a large degree, rely on the central banks to step in and provide liquidity for central banks.trying to make sure that in the core currencies and in particular, the dollar, we have liquid portfolios. think this is true, necessarily. yes, this is true. we observed that this happens globally. addition to the reserves, what will happen is a swap. it is a huge amount of r&b swap lines. also is very important on the education side. currenciesl reserve -- academically, they are always debating whether one figure is more stable. moment,his particular the confusing comments on the dollar, not necessarily enhance or stabilize the reserve francine: benoit? >> it's very important, as axel at the wheel of the system. dollar would be used if there would be any liquidity within the system, which is the case today. if he moved to the other side of rulesonomy, you see trade changing. you see trade gaining importance. the importance within the foreign-exchange reserves. we at the ecb have invested 500 million euros, which is small. it's a small token. it is a way for us to learn about the marke

central bank whether or not the european central bank will be able to buy shares in apple as swiss the swiss national bank has done swiss national bank owns millions of dollars worth of shares of apple by the way that's part of their portfolio so whether or not the u.s. government could do that without causing hyperinflation i don't think that they could do it like the swiss national bank has done and all of these mad markets whether it's kodak coin or the s. and p. five hundred already hitting near and estimates in the first eight days you know this could be the sort of spiral the vortex the craziness that you know these eight years ago or nine years ago was set in ten years ago back in two thousand and eight when they central bank started going insane is this is finally they're finally getting the inflation that they want but i don't know whether or not it will be out of control well you do have some pressure on the u.s. dollar or the reserve currency is trending down if you see that break ninety on the index you know they're going to have a free fall which would be a catastrophic ev

we are starting to see other central banks starting to see other central banks starting to see other say there is no requirement to have such exceptionally easy monetary policies, we are going to see central banks stepping back a little bit and that's going to make it more interesting to see how the financial markets can actually operate on their own as it were. so moving away from the training wheels or the stabilisers which have been supporting markets. will the attention be off central banks to a degree? i feel in 2017 we were just watching them all like hawks really? i'm not saying, i wouldn't say that the attention is off, but it is switching to different central banks. so, growth, still looks to be firm both in 2018 and in 2019, but the question is how are the financial markets going to be able to operate as we start to see less stimulatetry performance from those central banks. we have seen the federal reserve hike interest rates in two years. it is the turn of others to step up to the plate. jeremy, thank you. you're really upset, you love talking about central banks. i do. i

the kind of innovation around central banking i think is important.econdly, globalization has dampened, kind of, wage pressure. there's no question about that, that you constantly have new pools of labor that are entering the global labor market, the global supply chains. and so that has certainly made it very difficult suddenly to have a wage spiral going on. and then technology certainly is another piece where the combination of technology, competition, and integration of new economies, of new spaces, new pools of labor has made it difficult indeed for inflation to behave the way it would have behaved in the 1960's or 1970's. francine: so should we still look at the phillips curve? i can't make -- you know, is it broken, or is it dead? philipp: i think maybe that's the wrong question to ask when you kind of ask it bluntly like that. it is more about, how do we think these forces will evolve over time? and i think it's true that prices behave differently today than they did some decades ago. and probably that will not change. so i think we do have --

central bank whether or not the european central bank will be able to buy shares in apple as swiss the swiss national bank has done swiss national bank owns millions of dollars worth of shares of apple by the way that's part of their portfolio so whether or not the u.s. government could do that without causing hyperinflation i don't think that they could do it like the swiss national bank has done and all of these mad markets whether it's kodak coin or the s. and p. five hundred already hitting near and estimates in the first eight days you know this could be the sort of spiral the vortex the craziness that you know these eight years ago or nine years ago was set in ten years ago back in two thousand and eight when these central banks started going insane is this is finally they're finally getting the inflation that they want but i don't know whether or not it will be out of control well you do have some pressure on the u.s. dollar world reserve currency is trending down if you see that break ninety on the index you know they're going to have a freefall which would be a catastrophic ev

central bank whether or not the european central bank will be able to buy shares in apple as swiss the swiss national bank has done swiss national bank owns millions of dollars worth of shares of apple by the way that's part of their portfolio so whether or not the u.s. government could do that without causing hyperinflation i don't think that they could do it like the swiss national bank has done and all of these mad markets whether it's kodak coin or the s. and p. five hundred already hitting near and estimates in the first eight days you know this could be the sort of spiral the vortex the craziness that you know these eight years ago or nine years ago was set in ten years ago back in two thousand and eight when they central bank started going insane is this is finally they're finally getting the inflation that they want but i don't know whether or not it will be out of control well you do have some pressure on the u.s. dollar world reserve currency is trending down if you see that break ninety on the index you know they're going to have a freefall which would be a catastrophic even

i don't think the dominant news will come from central banks.hing the central banks will have to take, a cautious approach. i don't think the disturbance and financial markets will come from central banking. they are on track to what they announced. in other what it is risks you mentioned. yousef: let's bring in steve price. good to see you. >> good morning. yousef: you listen to a lot of key decision-makers in davos. there's two narratives that stand out. one is a narrative of global economic growth. there's asset classes along the world, then there's the other narrative that says, well, there are a lot of risks not being priced into markets correctly. which of the two narratives strikes you more? on the time.ends for now, everything looks good. inflation's are good, but overall the macro environment still seems favorable. but, but, this won't go on forever. we are all trying to figure out what's going in. will we see exits coming through due to rising inflation? it's the latter -- it's that scenario that could play out, just depending on the t

in the world will start buying bitcoin they'll break ranks from the other central banks that are colluding to aggressively expand money supply to bail out corrupt banks but when one of these banks breaks off and says you know what we can triple quadruple quintuple our money by going into crypto and you guys can go and fend for yourself then the torrent of those trillions of dollars worth of cash that have been kept out of the economy due to illegal machinations by the central banks comes flooding in and the real hyperinflation kicks in the dollar crashes spectacularly that's happening and twenty eight team by the way the kaiser report was also born in two thousand and nine just to not that we're all the same but we were born the same year bitcoin wise i'm not a toshiba and we're in a new studio here and i want to say we will be getting some sort of like graphics and stuff like that behind us but i just want to introduce you to our new studio here in raleigh so happy birthday to us happy birthday to soto she nakamoto. this is toshi i knew it. well stay tuned for the second half a

central bank whether or not the european central bank will be able to buy shares in apple as swiss the swiss national bank has done swiss national bank owns millions of dollars worth of shares of apple by the way that's part of their portfolio so whether or not the u.s. government could do that without causing hyperinflation i don't think that they could do it like the swiss national bank has done and all of these mad markets whether it's kodak coin or the s. and p. five hundred already hitting near and estimates in the first eight days you know this could be the sort of spiral the vortex the craziness that you know these eight years ago or nine years ago was set in ten years ago back in two thousand and eight when they central bank started going insane is this is finally they're finally getting the inflation that they want but i don't know whether or not it will be out of control well you do have some pressure on the u.s. dollar world reserve currency is trending down the pixy that break ninety on the index you know they're going to have a freefall which would be a catastrophic event

we have to be investing in some central banks.s it also represent the cloud that china does have and the need for trade financing , a number of different avenues that you want to have this currency? >> as a central bank, you have a currency in your currency reserves to the extent you need it. it is not necessarily whether we needed in order to fit phil our ll ourtion -- to fulfi obligation. we want to have the accounts in this currency that we want to understand the markets of government bonds, etc.. we share the concerns the imf has, so the answer is two yeses on your question. do you have any clear indication that china is liberalizing its fx mechanisms? >> it is their decision. how quickly they will want to do this. they are internationalizing. still, there are obstacles. sometimes there are interventions. it is not 100% predictable kind of regulatory changes you have. there are also obstacles to using it. more needs to be done. it does not have an anchor currency status. reporter: the biggest obstacles would be the restriction

other central banks moved before the ecb. this should also be part of the german currency reserves. amount, butmajor something we decided on and want to be part of, so the fact the roman the is included in the sdr basket and the fact -- the renminbi is included in the sdr basket is one of the factors in including it. >> with the sdr inclusion, you probably had concerns the currency is not a free floating currency. it has restrictions and there are strict capital controls in china. do you share these concerns? >> yes, we do. nevertheless we may have part of our moneies to the imf in renminbi, so we need accounts and need to meet our obligations as the fourth largest member of the imf in remember the -- in renminbi, so we have made that decision. it does the fact we have decided to go forward. >> sometimes a journalist has to ask the most obvious question. why included at this time? >> it is now part of the sdr. it is part of for quota potentially in renminbi and because of the ecb investing in central banks in the eurozone. >>

once the central banks collectively -- i do believe there has been a global reaction whether it's thek of japan or bank of england that steps in that's causing issues around credit and the way that we price credit. once they take the foot off that's when the risks come in. that's when you really understand fundamentally whether or not -- whether it is steinhoff or any other name out there is priced properly according to what the underlying fundamentals are of the country. david: as warren buffett's tied goes out we find out who is wearing a bathing suit. out.reads have to widen alix: only once central banks start to pull back. >> there's a tremendous amount of excess cash in the marketplace. this is something we are seeing and interpreting in things like the verizon cryptocurrencies. the money has to go somewhere. i wouldn't necessarily see a violent switch back to a widening environment. i think it would be gradual. it would be foolish for us to believe that after years and years of the central bank intervening directly into a market as a one-way buyer that when they finally pulled h

central banks do not currency hedge.here are pension funds in the world that do not currency hedge. there are life insurance companies that do not currency hedge. there are different types of investors in the world, they look at things in different ways. for those that don't currency hedge, the treasury market is the best place to be. jonathan: going to credit now, remarkably solid coming into the new year. rallied a lot higher than many people thought it would go, never mind in the first couple of weeks. have you been surprised by what we have seen in the early part of the year? .ichael: maybe to some extent if you look at the past two or three years, going into every year, most investors could contract a bearish story on credit. it was always around valuations. i think you have to put about the rations in the context of fundamentals, and fundamentals are very supportive. like i said earlier with tax reform, they are about to get even better. valuations should be compressed, spreads should be tight. it is not a table po

in the world will start buying bitcoin they'll break ranks from the other central banks that are colluding to aggressively expand money supply to bail out corrupt banks but when one of these banks breaks off and says you know what we can triple quadruple quintuple our money by going into crypto and you guys can go and fend for yourself then the torrent of those trillions of dollars worth of cash that have been kept out of the economy due to illegal machinations by the central banks comes flooding in and the real hyperinflation kicks in the dollar crashes spectacularly that's happening and twenty eighteen by the way the kaiser report was also born in two thousand and nine just not that we're all the same but we were born the same year bitcoin wise i'm not a toshiba we're in a new studio here and i want to say we will be getting some sort of like graphics and stuff like that behind us but i just want to introduce you to our new studio here in raleigh so happy birthday to us happy birthday to soto she nakamoto. there's a toshi i do it. well stay tuned for the second half a lot comin

we have to be investing in some central banks.r: does it also represent the clout, the growing financial clout that china does have and the need for trade financing, a number of different avenues that you want to have this currency? basically, as a central bank, you have a currency in your currency reserves to the extent you need it. it is not necessarily whether we need it in order to fulfill our obligation as a central bank, but it is also the fact that we want to have the accounts in this currency that we want to understand the markets of government bonds, etc. we share the concerns the imf has, so the answer is two yeses on your question. reporter: do you have any clear indication -- you said you have had these negotiations for the last six months -- so do you have any clear indication that china is liberalizing its fx mechanisms? andreas: it is their decision. it depends on how quickly they will want to do this. they are internationalizing. usedenminbi is much more than it was before. still, there are obstacles. sometimes the

the german central bank governor.ments come after the account of governing, show policymakers, tweaking guidance to align with spurringgth economy, the rise in the euro at the end of last week. betting the bond buying will end in september, this certainly adds to that discussion. a new chapter in the ongoing feud between qatar and its neighbors. jetsae says qatar fighter intercepted commercial planes that were headed to bahrain. qatar denies but qatari stocks fell. joining us now is the managing editor for africa and the middle east. the fact that qatar is disputing what the uae is saying, what do we know is the truth or the half-truth here? >> great question. who knows? itsou say, qatar is denying fighter jets intercepted the planes. the uae is standing by its assertion. we had a selloff in stocks today. the biggest since this kicked off last summer when saudi arabia, egypt and uae severed ties with qatar. i'm not sure it matters, whether it is true or not. hadhe sense that, we have relative calm in this conflict and

amend legislation the central bank has stated its position on this matter the central bank is quite conservative as is the russian government and i think we have every reason to be conservative at this point because we know that. there is nothing. to back up crypto currency that cannot be used for deposits it's not secured by any assets. in. certain situations it can be used for transactions it's quite easy to. use it for payment but you can't use it. as a reserve currency and it's extremely volatile you can get rich quickly and then tomorrow you can lose everything. and then just like with those people who call in who are activists call investors in. additional construction projects if there is not enough regulation the government will have to help people who are find themselves in these difficult situations where all their money is gone at this point. the people. the people themselves who are responsible if they lose their all their money and then if we don't have. proper regulation we may run into problems which we may have to sort of you know we've been talking. telling people that they shou

i wonder if the central banks are starting to -- as the market is starting to realize the central banksing note, because yesterday, at the goldman sachs conference in frankfurt, everyone was talking about the fed raising four times this year, even though the dot plot only shows a plan for three increases. by the way, dots is a great function to see what the fed is looking for, but it -- is the market starting to expect more from the fed than the fed is showing? john: it is beginning to tip that way. i mean, if you look at market pricing versus the dots, they are probably still below, but the market has always underpriced dots, but it is probably closer to where it has been for some time. i think markets are beginning to build in the risk that the fed do more than they said. last year, for the first time in a number of years, they actually followed through on their promises, so the risk of them doing that is there. it is a cyclical story, and it is more about growth, it is more about unemployment, and it is pretty broad spread. you are seeing it in japan at the margin. you're defini

she has an important avenue with the central bank leadership of with africa -- interview the central of south africa. when in doubt, hire and economist -- higher an economist.- hire an studiedt to hosea, who at harvard. they provided economic wisdom to any number of managing directors. he joins us this morning, as chairman of standard chartered. what did you do on day one when you moved to the world of standard chartered? what was your mandate from day one? >> my mandate was to be the guardian of the interests of the company, in particular of the. shareholders. that was my mandate and motivation. i have acted since in a way that is best for the company, together with my 4 colleagues and our colleagues from the management team. tom: the standard chartered bank nersonifies being in a inclusive economy and an inclusive financial system. what will be the distinguishing feature of standard chartered? >> we are the international 70k, where present in nearly markets across africa, the middle east, and asia. there is no other bank that is present in these three parts of the world in the way t

week in central bank rhetoric, the bank of japan, european central bank guiding us a little more.ke in the bund. they got dumped yesterday. anna: interesting to see stock markets managing to make hay despite the turmoil in the bond markets and concerned about where central-banks go next. let's talk about the investor futures, pretty flat at this stage. let's get a business flash with juliette saly. facebook is making major changes to its flagship social network, changing newsfeeds back toward folk -- posts from friends and families and away from businesses. feedback has shown public content is being -- has been crowding out personal moments that lead us to connect with each other. he also said the transition is likely to mean people spend less time on the site. after about a decade as the company acknowledged its expertise were in brands like gucci, rather than developing the track and field outfitter. 17%, andll distribute bloom's outstanding shares. vivendi has reported earnings in sales growth that fell short of earlier forecasts, dragged down by pay-tv. sales increased by all

i do think that the key question here is what effect do central bank announcements have on inflation expectation. bank of japan had trouble with that one. and i suspect that the fed announcement that we'll go to 4% if unless inflation had already risen to near that level. could be a problem. and announcing something when you're well below it and failing to get there could be devastating to credibility. >> so your question about international. i think is very important. and for the last few years there's been a tendency for central banks to follow each other. it's quite clear the examples i give is japan followed the u.s. in because the was too strong. and the follows israel because the euro is too strong. both actions change the currency dramatically. and countries all over the world worry about exchange rate behavior because of the policy. this is a global phenomenon. i have a great concern about the exchange rate. effects. many people feel we need to have a more rules based international system. that is not a view of a few people. i think the best way to get to rules based internati

and banks banks engage in central banks in gauging q.e. again hoping to spur borrowing and lending and consumption in their countries i would look for more of the same from the bank of england we saw one rate hike last year we might see one possibly two but when it comes to the bank of england's q.e. program i would expect for that to continue for the rest of the year the bank of japan is has also been very adamant about its own two percent inflation target it is it is had to ratchet back its quantitative easing from from mechanical reasons but i would expect for them to keep the pedal to the metal for all of two thousand and eighteen as well now that's and that's in sharp contrast to the federal reserve where we were unwinding the balance sheet here that's a form of quantitative tightening and the european central banks state it commitment to taper its purchases starting the first business day of the year when you combine those two and this is a very important point when you combine those two types of tightening you're talking about a tril

introduction to it which mentions bank bank fraud problems in the banking system and problems in the central bank system it's always been a race against the failure of the current system the failure of the banking system in the failure of the money system the fractional reserve system the what you're talking about would require more organization that's possible in an environment of more failing banks in twenty eighteen i think we're going to see a big bank like do it your bank collapse or some big bank in the u.k. collapse because as you know and as i know you know they are technically insolvent italy italy will collapse i mean italy is on the verge of collapse that will change that chain reaction that sets off and the chaos that and says it will that it's not going to be ability to manage that any anyone reasonable way and i think that's why this push to bitcoin and i think bitcoin price the reason is so high is that it's discounting ok. banking armageddon it's telegraphing as markets are discounting mechanism they're telling us that in very near future you're going to have another two thousand

i will not go into detail, but if i had to say the big difference between the central banks and politiciansn the crisis, i could talk to another central banker confident that it would be a conversation in confidence, and it would be treated with discretion. i think that whatever discussions took place with politicians, they seemed to end up in the, in the media. francine: how did you cope with the financial crisis? what are the attributes that a central banker needs for working under pressure, extreme pressure? ♪ ♪ francine: long before mervyn king set foot on threadneedle street, he was an academic teaching in prestigious institutions like the university of cambridge, harvard, and m.i.t., where his office happen to adjoin to then assistant professor ben bernanke. in 1991, he brought his quick thinking to the bank of england as its chief economist, moving up the ranks to deputy governor then to the top job. it was a long way from his humble beginnings in the english midlands. what did you want to be as a child? lord king: i wanted to play cricket for my county, worcestershire. i would play

there has been $14 trillion bonds bought by central banks.t appears to be close to an end. >> beijing rebuffs. china is claiming the bloomberg report saying officials reviewing the countries affect scolded -- fx holding recommended slowing or halting purchases of u.s. treasuries might have quoted a wrong source or maybe fake news. the bloomberg report cited people familiar with the matter and noted it wasn't clear whether the recommendations had actually been adopted. this is a huge deal in how traders look if china wants u.s. treasuries or not. how do we get to the bottom of it? what happened? >> today, the state administration of foreign exchange, they are an arm of the central bank in china, they put out a carefully worded statement where they fell short of the denial of our story, a full and complete denial. they went on to say they pursue a policy of diversification when it comes to investing, foreign reserves, and that they always look to market conditions when it comes to u.s. treasuries. >> the account for the ecb meeting has particul

carney, who is to me the governor, to others is really the governor of the bank of england, and the central banks have so many governors after all. to his left is carey lamb, the chief executive of hong kong. to her left is hadarico, governor of the bank of japan, who has actually been a friend of mine for 40 years. we met at oxford. to his left is mary edos, chief executive officer of jpmorgan's asset and wealth management who i've met and shared panels with now on quite a few occasions. i'm looking forward very much to this one. let's start with a short term economic outlook. you've just recently -- i will produce your update wonderfully cheerful in every respect forecasting 4.9% for this year and the next. so what could go wrong? >> let's celebrate what could go right for the moment. we are in a speed spot. 3.9, 3.92018/19 is not bad. what is interesting, about 120 countries have actually seen their growth increase last year and we only have 1/5 of developing emerging companies have seen the gdp basis decline. it's well spread out and shared between economies, emerging market economies and par

point number two and this is the more important question nothing really long-term that the central bank wants to signal its intelligence at the horizon of one to two years as a formal target or guidance for threshold in the bank of england back when is the best economic variable ts are used to signal your intentions short-term interest rates and so on. my claim and assignment is a proposition if the banks want to communicate their intentions at a one to two year horizon it would be more effective if they do praise to that commitment for communication or guidance in terms of nominal gdp rather than inflation. you can't hit it exactly to say the mandate is to do everything it can to get as close as possible as the governor fails then the issue is fired. i was like the fantasy we all had about new zealand in the '90s but anyway, that would be the most extreme. whether it is inflation or nominal gdp or anything else is not credible. i'm going to make a nonthreatening my old proposal. they release the economic projections i think in 60, committed by the governors and bank presidents i propos

monetary fund, to her left, mark carney who is to be the governor, and the bank of england and central banks of so many governors after all. to his left is carrie lam, chief executive of hong kong and to her left, the governor of the bank of japan, a friend of mine for 40 years. and the officer of jpmorgan, and quite a few occasions. to this one. let's start with the short-term economic outlook and you have recently -- your update which is wonderfully cheerful in every respect forecasting 3.9% growth this year and next. what could go wrong? >> let's celebrate what could go right for a moment. we are in a -- what is more interesting, seeing growth increased last year. and emerging markets economies, part of the world i worry most about this where we have a combination of factors that leads to the lower income per capita. and negative downside risks and policies that have been implemented by policymaker's, and the cyclical -- what was implemented. he had no idea about ten years ago. fiscal policies that have been reasonably good. it is debatable eight years ago, in the main it is a result of g

and the central bank has so many governors, after all. and to his left is kari lamb, chief executive of hong kong. and to her left, is mr. korodo, governor of bank of japan, who has been a friend of mine for 40 years. we met at oxford. to his left, is mary cullen, chief executive officer of jpmorgan's asset and wealth management. whom i've met and shared panels with now quite a few occasions. i'm looking forward very much to this one. so let's start with a short term economic outlook and you've just recently, may i produce your update, which is cheerful with 3.9% growth for this year and next. so what could go wrong? >> let's celebrate what could go right for the moment. because we are in a sweet spot, as i've said. 3.9, 3.9, 2018, 2019. not bad. what i think is even more interesting is that about 120 sk countries have actually seen growth increase last year. we only have about one-fifth of emerging countries seeing gdp on per capita basis decline. so it is well spread out and shared between advanced economies, merging market economies and

not the really long term but if central bank wants to signal intentions one to two years either through formal target or guidance unemployment or the bank of england some years back, what is the best economic variable to use to signal your intentions? inflation and exchange rate, price of gold. short-term interest rates, unemployment rates, so on. my claim is and my assignment before you today is to defend the proposition that if central banks want to communicate their intentions at a one to two year horizon, it would be more effective if they phrased that commitment or that communication or that guidance in terms of nominal gdp rather than in terms of cpi inflation. you can't hit it exactly. as far would be to go would be to say the mandate is doing everything you possibly can to get as close as possible and if the government fails, she is fired. that's the fantasy we all had about new zealand in the 90s. i don't think they actually did that, but that would be the most extreme. i think such high level of commitment, whether it's inflation or nominal gdp or anything else is not credible

china's central bank has shaken up the currency market.hibbett sports biggest drop in two months after changes the way it manages the currency. what does this tell us about their approach to the yuan and its overall policy? >> it's a combination of the pboc unwilling to tolerate anymore currency constraints. earmarked comfortable with -- they are more coupled with the level of volatility. it was viewed as a way to curb volatility in the currency. now, that is not such an issue anymore. maybe the central bank is wes less willing to impose control on that front. vonnie: is some sort of pushed back due? >> absolutely. we've been approaching that key 65.50 level. we have seen them push back against this. shortly after they responded with the reserve requirement raciatio cut, that made it easier to -- this feels like a bit of a response to that price. mark: i'm looking at the broader market response. are we going back in time? >> it's very interesting. we have certainly seen the set up for higher yields this year in terms of other factors like

particularly when a time central banks will be buying less bonds.'t think the chatter about whether the fed might adapt its inflation targeting this year and potentially move to somewhat softer point target, the boston fed president said on friday about favoring 1.5% to 3% range for inflation. he fears the fed will have to slam its feet on the brakes to but the u.s. economy in recession. if the fed is going to be tolerant of inflation, that is another factor that could to -- that could undermine support for the u.s. dollar. haidi: do you think a powell fed could be amenable to that tweaking? ray: we've always said that the fed will be mandate and data dependent. it the move from janet yellen giving way to jay powell should not change that. this debate about the efficacy of the hard 2% inflation target has exploded to the forefront of central bank thinking over the last six weeks or so. that potentially is a game changer. themandate has changed, if fed is going to be targeting a range for inflation, rather than saying that 2% is the hard upper limit.