In North America, there are currently two very contradicting states between the Central Banks of Canada and the Federal Reserve of the United States. According to a senior central bank official, the Bank of Canada will not respond mechanically to any future move by the U.S. Federal Reserve to raise interest rates. Deputy Governor Timothy Lane spoke to an audience in Waterloo, Ontario and stated that “tighter monetary policy in the U.S. would lead to higher market interest rates globally, producing a tightening effect for Canada.”
globalEDGE Blog - By Tag: central bank regulation series
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East Asia is home to three of the biggest economic powerhouses in the world: China, Japan, and South Korea. Thus, the well-being of the global economy often depends on the region's pecuniary health. Central banks already hold the utmost power in this regard; yet, in recent times, each nation's bank has led endeavors to consolidate further economic control. The effects of these measures, along with last week's global market shakeups, have paved a path of economic uncertainty. Here is a look at recent developments in East Asian central banks.
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In conjunction with our blog series on central banking policy throughout the world, today we turn our attention to Central America and the unique fiscal and monetary landscape that is often an afterthought when examining the world economy. For the purposes of this blog, when referencing Central America, we are incorporating Mexico and all other continental countries of North America that are south of the United States of America. While Europe, Japan, and the US are locked into low interest rate environments, Central America offers a unique landscape for central banking.
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Despite the trade agreement disputes, political instability, and concerns about the United Kingdom’s withdrawal from the European Union, the European economies have continued to grow slowly and steadily. During the months of July through August in the third quarter, GDP rose 0.3%, consumer prices rose up to 0.5%, and economic growth as well as inflation occurred as predicted. Global economic growth is based on the productive potential of a country, and the Eurozone economy has, for the past few months, experienced a steady yet sluggish growth.
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Global interest rates currently span a wide range; from Switzerland, at a negative 0.75%, to Belarus at 28.5%. Overall, 45% of the world’s central banks lowered their rates in the last year, 29% increased their rates, and the remaining 26% left their rates unchanged. Central banks are often nationalized institutions that are usually independent from the government, but whose privileges are established and protected by law.