economics

Account Keeping

5 March 2013

I have been digging through some family archives and came across an old bank passbook belonging to my great grandfather, William Booth. He lived in Perthville in the central west of NSW. His account was with the Bank of New South Wales, Bathurst branch. Pasted inside the front cover is a statement of the account […]

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Prisoner of Speed

17 February 2013

A favourite podcast of mine is known in our household as “Danny’s podcast” in honour of the friend who first put me on to it. The podcast is better known as Radiolab and last week’s episode turned on the theme of Speed. After answering the question, what is the fastest sense, attention turned to high-frequency […]

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Where is the money coming from?

18 January 2013

It has been quite some time since I wrote about the mechanics of money, but today I am at it again. The catalyst is not, as some might expect, the recent discussions about the possibility of the US Treasury minting a trillion dollar coin, but rather a recent discussion I had with a banker about […]

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Trust

12 August 2012

During the week I attended a farewell function for a retiring colleague. The turnout was impressive, a sign of deep respect earned over a career at the bank spanning more than forty years. In the speeches, a recurring theme was trust. The primary business of a bank is lending money, which exposes the bank to […]

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Shadow Banking

12 June 2012

The Financial Services Authority (FSA) is the banking and financial services regulator in the UK. For now at least. Back in 2010, the Chancellor of the Exchequer (the equivalent of the Treasury in Australian terms) announced plans to scrap the FSA in response to a failure during the financial crisis of the 10 year old “tri-partite […]

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Goodhart’s Law

23 April 2012

Another post and another Law, but this time no mathematics is involved. Imagine you are running a team of salespeople and, as a highly motivated manager, you are working on strategies to improve the performance of your team. After a close study of your team’s client call reports you realise that the high performers in […]

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Bitcoin revisited

5 March 2012

Just over a year ago, I wrote about the digital “crypto-currency” Bitcoin. It has been an eventful year for Bitcoin. Designed to provide a secure yet anonymous, decentralised means for making payments online, the first Bitcoins were virtually minted in 2009. By early 2011, Bitcoin had begun to attract attention. Various sites, including the not-for-profit […]

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More spreads

17 November 2011

To provide a bit more context for the French government bond spreads discussed in the last post, the chart below shows the 5-year spreads to German bonds for a few more European countries. With spreads over 4300 basis points (43%), the chart is dominated by Greece, so here is the chart again with Greece removed. […]

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French spreads

17 November 2011

Changes of leadership in both Greece and Italy were initially well-received by markets, but investors are getting nervous again. Attention is shifting to France, and French government bonds seem to be on the nose. The chart below shows the “spread” between French and German 5-year government bonds. Measured in basis points (1/100th of 1%), the […]

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The oldest bank in the world

29 October 2011

Yes I am back. I know it has been a while. What can I say? I have been quite busy! One of the things taking up my time during the week was preparing for and then giving a talk for the Q-Group on operational risk capital modelling. It sounds arcane, I know, but there was […]

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