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Capital Wars pp 101-140 | Cite as

The Central Banks: Don’t Fight the Fed, Don’t Upset the ECB and Don’t Mess with the PBoC

  • Michael J. Howell
Chapter
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Abstract

The US Federal Reserve; the People’s Bank of China (PBoC) and, to a lesser extent, the European Central Bank (ECB), are the dominant global players. The US Federal Reserve and the ECB have recently seen monetary control badly shaken, whereas the PBoC’s liquidity multiplier has remained remarkably stable. The Federal Reserve operated through three channels following the 2007–2008 Global Financial Crisis (GFC)—liquidity provision, maturity transformation and credit enhancement. The policies of other Central Banks are less definitive. The PBoC still focuses on quantitative policies to provide liquidity, with their domestic monetary operations becoming far more important since the disruption to foreign exchange reserve accumulation in 2015. The ECB has struggled to maintain liquidity provision since the GFC and has lately been forced to focus increasingly more on credit enhancement policies.

Keywords

Global Liquidity Central Banks Liquidity multiplier Federal Reserve People’s Bank of China ECB Shadow monetary base 

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Copyright information

© The Author(s) 2020

Authors and Affiliations

  • Michael J. Howell
    • 1
  1. 1.CrossBorder Capital Ltd.LondonUK

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