Money View Reading Group

24 Mar 2021

Minsky | Session 1

Minsky by Daniel H. Neilson --Flyer and discount code for book-- March, 24th March, 1:00pm ET / 5:00pm GMT / 6:00 pm CET (attention: switch to daylight savings time) Chapters discussedCh 1 - IntroductionCh 2 - Financial capitalismCh 3 - A payments theory of financeCh 4 - The inadequacy of economics

31 Mar 2021

Minsky | Session 2

Minsky by Daniel H. Neilson --Flyer and discount code for book-- March 31st, 1:00pm ET / 5:00pm GMT / 7:00 pm CET Chapters discussedCh 5 - Making the marketCh 6 - Last resortCh 7 - The resilience of economicsCh 8 - Minsky for all moments

7 Apr 2021

Minsky | Session 3

Join us for a discussion with Dan Neilson, the author of 'Minsky'.

21 Apr 2021

The Art of Central Banking - Ralph Hawtrey (1933) | Session 1

Welcome to our discussion of Chapter IV - The Art of Central Banking (from Ralph Hawtrey's book with the same title). For this session, we will be focusing on the following sub-chapters (pages 116 - 174): The Lender of Last ResortThe London Discount MarketThe Bank of England Before 1844The Bank of England, 1844-73Eligible Bills and SecuritiesThe Bank of England and the Note IssueBank Rate and Foreign ExchangesBank Rate After 1844Attracting Foreign MoneyThe Cunliffe CommitteeRelease and Absorption of CashThe International System.The Central Bank's Power Over Credit.The Response of the Borrowers.Credit For Fixed Capital and the Stock Exchange.The Inherent Instability of Credit.

5 May 2021

The Art of Central Banking - Ralph Hawtrey (1933) | Session 2

Welcome to our discussion of Chapter IV - The Art of Central Banking (from Ralph Hawtrey's book with the same title). For this session, we will be focusing on the following sub-chapters (pages 174 - 302): The Gold StandardExternal InvestmentInternational Short-term InvestmentThe Financing of International TradeThe Value of GoldGold ReservesLondon and the Trade CycleStabilisation in the United States, 1922-28Gold and Money since 1914The Depression of 1929-1931The Crisis of 1931Mutual Support of Central BanksSpecial Responsibilities of LondonThe American PositionThe Responsibility for the Depression and CrisisThe Conditions of Future StabilityGold ReservesStabilisation without GoldCentral Banks and InflationAn International Central Bank

19 May 2021

BIS Working Paper: Breaking free of the triple coincidence in int. finance

This week we will discuss the 2015 BIS Working Paper 'Breaking free of the triple coincidence in international finance'. Abstract The traditional approach to international finance is to view capital flows as the financial counterpart to savings and investment decisions, assuming further that the GDP boundary defines both the decision-making unit and the currency area. This "triple coincidence" of GDP area, decision-making unit and currency area is an elegant simplification but misleads when financial flows are important in their own right. First, the neglect of gross flows, when only net flows are considered, can lead to misdiagnoses of financial vulnerability. Second, inattention to the effects of international currencies may lead to erroneous conclusions on exchange rate adjustment. Third, sectoral differences between corporate and official sector positions can distort welfare conclusions on the consequences of currency depreciation, as macroeconomic risks may be underestimated. This paper illustrates the pitfalls of the triple coincidence through a series of examples from the global financial system in recent years and examines alternative analytical frameworks based on balance sheets as the unit of analysis. Robert McCauley has recently conducted follow-up work https://www.bis.org/publ/work524.htm Robert McCauley has recently conducted follow-up work, which we will also discuss. Find the full paper here. The Global Domain of the Dollar: Eight QuestionsRobert N. McCauleySince the late 1950s, the rest of the world has come to use the dollar to an extent that justifes speaking of the dollar’s global domain. The rest of the worlddenominates much debt in U.S. dollars, extending U.S. monetary policy’s sway. In addition, in outstanding foreign exchange deals, the rest of the world has undertaken to pay still more in U.S. dollars: of-balance-sheet dollar debts buried in footnotes. Consistent with the scale of dollar debt, most of the world economic activity takes place in countries with currencies tied to or relatively stable against the dollar, forming a dollar zone much larger than the euro zone. Even though the dollar assets of the world (minus the United States) exceed dollar liabilities, corporate sector dollar debts seem to make dollar appreciation akin to a global tightening of credit. Since the 1960s, claims that the dollar’s global role sufers from instability and confers great benefts on the U.S. economy have attracted muchsupport. However, evidence that demand for dollars from official reserve managers forces unsustainable U.S. current account or fscal defcits is not strong. The so-called exorbitant privilege is small or shared. In 2008 and again in 2020, the Federal Reserve demonstrated a willingness and capacity to backstop the global domain of the dollar. Politics could constrain the Fed’s ability to backstop the growing share of the domain of the dollar accounted for by countries that are not on such friendly terms with the U.S.

26 May 2021

Ralph G. Hawtrey Discussion with David Glasner

Welcome to our discussion of Ralph G. Hawtrey with David Glasner. After our reading of Art of Central Banking, we'd like to dedicate this discussion to deepening our understanding of Hawtrey's ideas and how they apply to our modern context. David Glasner, economist at Federal Trade Commission, is the creator of Uneasy Money, a blog dedicated to 'Commentary on monetary policy in the spirit of R. G. Hawtrey'.

2 Jun 2021

Christine Desan - Making Money | Session 1

This is the first of three sessions to discuss Christine Desan's book Making Money: Coin, Currency, and the Coming of Capitalism. For this session, we will begin by discussing the introduction and chapters 1-3. Book Description: "Money travels the modern world in disguise. It looks like a convention of human exchange - a commodity like gold or a medium like language. But its history reveals that money is a very different matter. It is an institution engineered by political communities to mark and mobilize resources. Associeties change the way they create money, they change the market itself - along with the rules that structure it, the politics and ideas that shape it, and the benefits that flow from it."

16 Jun 2021

Christine Desan - Making Money | Session 2

This is the second of three sessions to discuss Christine Desan's book Making Money: Coin, Currency, and the Coming of Capitalism. For this session, we will discuss chapters 4-7. Book Description: "Money travels the modern world in disguise. It looks like a convention of human exchange - a commodity like gold or a medium like language. But its history reveals that money is a very different matter. It is an institution engineered by political communities to mark and mobilize resources. Associeties change the way they create money, they change the market itself - along with the rules that structure it, the politics and ideas that shape it, and the benefits that flow from it."

30 Jun 2021

Christine Desan - Making Money | Session 3

This is the third of three sessions to discuss Christine Desan's book Making Money: Coin, Currency, and the Coming of Capitalism. For this session, we will discuss chapters 8-11 and the conclusion. Book Description: "Money travels the modern world in disguise. It looks like a convention of human exchange - a commodity like gold or a medium like language. But its history reveals that money is a very different matter. It is an institution engineered by political communities to mark and mobilize resources. Associeties change the way they create money, they change the market itself - along with the rules that structure it, the politics and ideas that shape it, and the benefits that flow from it."

7 Jul 2021

Robert McCauley "Global domain of the dollar: 8 questions"

In this session we will discuss Bob McCauley's recent paper "Global domain of the dollar: 8 questions". AbstractSince the late 1950s, the rest of the world has come to use the dollar to an extent that justifes speaking of the dollar’s global domain. The rest of the world denominates much debt in U.S. dollars, extending U.S. monetary policy’s sway. In addition, in outstanding foreign exchange deals, the rest of the world has undertaken to pay still more in U.S. dollars: of-balance-sheet dollar debts buried in footnotes. Consistent with the scale of dollar debt, most of the world economic activity takes place in countries with currencies tied to or relatively stable against the dollar, forming a dollar zone much larger than the euro zone. Even though the dollar assets of the world (minus the United States) exceed dollar liabilities, corporate sector dollar debts seem to make dollar appreciation akin to a global tightening of credit. Since the 1960s, claims that the dollar’s global role sufers from instability and confers great benefits on the U.S. economy have attracted much support. However, evidence that demand for dollars from ofcial reserve managers forces unsustainable U.S. current account or fiscal defcits is not strong. The so-called exorbitant privilege is small or shared. In 2008 and again in 2020, the Federal Reserve demonstrated a willingness and capacity to backstop the global domain of the dollar. Politics could constrain the Fed’s ability to backstop the growing share of the domain of the dollar accounted for by countries that are not on such friendly terms with the U.S.

14 Jul 2021

Making Money Book Discussion with Christine Desan

Professor Desan joins us for a discussion about her book Making Money: Coin, Currency, and the Coming of Capitalism. After reading Making Money, we look forward to discussing some of the themes and questions raised by the book and how they can help us understand money and the monetary system today. Christine Desan is the Leo Gottlieb Professor of Law at Harvard Law School where she teaches about the international monetary system, the constitutional law of money, constitutional history, political economy, and legal theory. She is the co-founder of Harvard’s Program on the Study of Capitalism, an interdisciplinary project that brings together classes, resources, research funds, and advising aimed at exploring that topic. She is also the founder and managing editor of JustMoney.org, a website that explores money as a critical site of governance. Desan’s research explores money as a legal and political project, one that configures the market it sets out to measure.

1 Sep 2021

The World in Depression, 1929-1939 by Charles P. Kindleberger | Session 1

From the book description:"In this magisterial account of the Great Depression, MIT economist Charles Kindleberger emphasizes three factors that continue to shape global financial markets: panic, the power of contagion, and importance of hegemony." This week's reading: Chapter 1 - IntroductionChapter 2 - Recovery from the First World WarChapter 3 - The BoomChapter 4 - The Agricultural DepressionChapter 5 - The 1929 Stock-Market Crash

15 Sep 2021

The World in Depression, 1929-1939 by Charles P. Kindleberger | Session 2

From the book description:"In this magisterial account of the Great Depression, MIT economist Charles Kindleberger emphasizes three factors that continue to shape global financial markets: panic, the power of contagion, and importance of hegemony." This week's reading: Chapter 6 - The Slide to the AbyssChapter 7 - 1931Chapter 8 - More DeflationChapter 9 - The World Economic Conference

29 Sep 2021

The World in Depression, 1929-1939 by Charles P. Kindleberger | Session 3

From the book description:"In this magisterial account of the Great Depression, MIT economist Charles Kindleberger emphasizes three factors that continue to shape global financial markets: panic, the power of contagion, and importance of hegemony." This week's reading: Chapter 10 - The Beginnings of RecoveryChapter 11 - The Gold Bloc YieldsChapter 12 - The 1937 RecessionChapter 13 - Rearmament in a Disintigrating World EconomyChapter 14 - An Explanation of the 1929 Depression

21 Jul 2021

Money in a Theory of Finance | Session 1

This is the first of two sessions to discuss the 1960 book Money in a Theory of Finance by John Gurley and Edward Shaw. For this session, we will begin by discussing chapters 1-4. Book Description from Perry Mehrling's Money & Banking MOOC: This is the first of two sessions to discuss the 1960 book Money in a Theory of Finance by John Gurley and Edward Shaw. For this session, we will begin by discussing chapters 1-4. Book Description from Perry Mehrling's Money & Banking MOOC: "This book was significant for bringing money back into economics in 1960, and emphasizing the importance of financial intermediation for economic growth. The language "inside" and "outside" money comes from G&S, as also "gross money view" versus "net money view". Their opponents are the monetary Walrasians, mainly Don Patinkin. But they don't really take a payments or market-making view, do they? Instead they emphasize the role of banks as financial intermediaries between savers and investors."

4 Aug 2021

Money in a Theory of Finance | Session 2

This is the second of three sessions to discuss the 1960 book Money in a Theory of Finance by John Gurley and Edward Shaw. For this session, we will discuss chapters 4 and 5. Book Description from Perry Mehrling's Money & Banking MOOC: "This book was significant for bringing money back into economics in 1960, and emphasizing the importance of financial intermediation for economic growth. The language 'inside' and 'outside' money comes from G&S, as also 'gross money view' versus 'net money view'. Their opponents are the monetary Walrasians, mainly Don Patinkin. But they don't really take a payments or market-making view, do they? Instead they emphasize the role of banks as financial intermediaries between savers and investors."

28 Jul 2021

A Money View Discussion on Central Bank Digital Currencies

Central banks are increasingly exploring central bank digital currencies (CBDC) and the topic often comes up in other discussions on money and banking. For this session we want to take some time to more directly discuss CBDC and some of the main questions around the topic, such as: What is a money view read on the impact to the private banking sector? How do CBDCs impact liquidity provision in money markets? How will parity between CBDCs and deposits be maintained? What new IOUs may emerge (e.g., promises to pay CBDCs)? What new dealers may be required? What institutions will likely play this role? For this session there is no specific required reading, but for those interested in an introduction to the topic or learning more, there are recent major reports from the BIS and Bank of England:https://www.bis.org/publ/arpdf/ar2021e3.htmhttps://www.bankofengland.co.uk/paper/2021/new-forms-of-digital-money

18 Aug 2021

Money in a Theory of Finance | Session 3

This is the third of three sessions to discuss the 1960 book Money in a Theory of Finance by John Gurley and Edward Shaw. For this session, we will discuss chapters 4 and 5. Book Description from Perry Mehrling's Money & Banking MOOC: "This book was significant for bringing money back into economics in 1960, and emphasizing the importance of financial intermediation for economic growth. The language 'inside' and 'outside' money comes from G&S, as also 'gross money view' versus 'net money view'. Their opponents are the monetary Walrasians, mainly Don Patinkin. But they don't really take a payments or market-making view, do they? Instead they emphasize the role of banks as financial intermediaries between savers and investors."

13 Oct 2021

The Rise of Carry | Session 1

This week we are reading Chapters 1-6. From the book description: "A groundbreaking book sure to leave its mark in the canon of investing literature, The Rise of Carry explains how carry trading has virtually shaped the global economic picture—one of decaying economic growth, recurring crises, wealth disparity, and, in too many places, social and political upheaval. The authors explain how carry trades work—particularly in the currency and stock markets—and provide a compelling case for how carry trades have come to dominate the entire global business cycle. They provide thorough analyses of critical but often overlooked topics and issues, including: •The active role stock prices play in causing recessions—as opposed to the common belief that recessions cause price crashes •The real driving force behind financial asset prices •The ways that carry, volatility selling, leverage, liquidity, and profitability affect the business cycle •How positive returns to carry over time are related to market volatility—and how central bank policies have supercharged these returns Simply put, carry trading is now the primary determinant of the global business cycle—a pattern of long, steady but unspectacular expansions punctuated by catastrophic crises. The Rise of Carry provides foundational knowledge and expert insights you need to protect yourself from what have come to be common market upheavals—as well as the next major crisis."

27 Oct 2021

The Rise of Carry | Session 2

This week we reading Chapters 7-13. From the book's description: "A groundbreaking book sure to leave its mark in the canon of investing literature, The Rise of Carry explains how carry trading has virtually shaped the global economic picture—one of decaying economic growth, recurring crises, wealth disparity, and, in too many places, social and political upheaval. The authors explain how carry trades work—particularly in the currency and stock markets—and provide a compelling case for how carry trades have come to dominate the entire global business cycle. They provide thorough analyses of critical but often overlooked topics and issues, including: •The active role stock prices play in causing recessions—as opposed to the common belief that recessions cause price crashes •The real driving force behind financial asset prices •The ways that carry, volatility selling, leverage, liquidity, and profitability affect the business cycle •How positive returns to carry over time are related to market volatility—and how central bank policies have supercharged these returns Simply put, carry trading is now the primary determinant of the global business cycle—a pattern of long, steady but unspectacular expansions punctuated by catastrophic crises. The Rise of Carry provides foundational knowledge and expert insights you need to protect yourself from what have come to be common market upheavals—as well as the next major crisis."

10 Nov 2021

The Money Interest and the Public Interest | Allyn Young

This is the first of three sessions to discuss Perry Mehrling's 1998 book The Money Interest and the Public Interest: American Monetary Thought 1920–1970 https://www.amazon.com/Money-Interest-Public-American-1920-1970/dp/0674584309/ Note that a hard copy of the book is hard to find right now. The book traces the development of monetary thought in the 20th century through three parts, each of which is an intellectual biography of a different economics professor. Perry Mehrling tells a story of continuity around the crucial question of the role of money in American democracy, a question associated generally with the Progressive tradition and its legacy, and more particularly with the institutionalist tradition in American economic thought. In this story, which he tells through the ideas and lives of three prominent institutionalists, Allyn Young, Alvin Hansen, and Edward Shaw, progress is measured not by the swings of fashion between two polar traditions of monetary thought--quantity theory and anti-quantity theory--but rather by the success with which each succeeding generation finds its footing on the shifting middle ground between the two extremes. This week, we discuss the introduction as well as chapters 1—4 on Allyn Young.

24 Nov 2021

The Money Interest and the Public Interest | Alvin Hansen

This is the second of three sessions to discuss Perry Mehrling's 1998 book The Money Interest and the Public Interest: American Monetary Thought 1920–1970 https://www.amazon.com/Money-Interest-Public-American-1920-1970/dp/0674584309/ Note that a hard copy of the book is hard to find right now. The book traces the development of monetary thought in the 20th century through three parts, each of which is an intellectual biography of a different economics professor. Perry Mehrling tells a story of continuity around the crucial question of the role of money in American democracy, a question associated generally with the Progressive tradition and its legacy, and more particularly with the institutionalist tradition in American economic thought. In this story, which he tells through the ideas and lives of three prominent institutionalists, Allyn Young, Alvin Hansen, and Edward Shaw, progress is measured not by the swings of fashion between two polar traditions of monetary thought--quantity theory and anti-quantity theory--but rather by the success with which each succeeding generation finds its footing on the shifting middle ground between the two extremes. This week, we discuss chapters 5—8 on Alvin Hansen

8 Dec 2021

The Money Interest and the Public Interest | Edward Shaw

This is the last of three sessions to discuss Perry Mehrling's 1998 book The Money Interest and the Public Interest: American Monetary Thought 1920–1970 https://www.amazon.com/Money-Interest-Public-American-1920-1970/dp/0674584309/ Note that a hard copy of the book is hard to find right now. The book traces the development of monetary thought in the 20th century through three parts, each of which is an intellectual biography of a different economics professor. *"Perry Mehrling tells a story of continuity around the crucial question of the role of money in American democracy, a question associated generally with the Progressive tradition and its legacy, and more particularly with the institutionalist tradition in American economic thought. In this story, which he tells through the ideas and lives of three prominent institutionalists, Allyn Young, Alvin Hansen, and Edward Shaw, progress is measured not by the swings of fashion between two polar traditions of monetary thought--quantity theory and anti-quantity theory--but rather by the success with which each succeeding generation finds its footing on the shifting middle ground between the two extremes."* This week, we discuss chapters 9—11 on Edward Shaw, as well as the conclusion.

5 Jan 2022

Controlling Credit | Session 1

This is the first of two sessions to read and discuss Eric Monnet's "Controlling Credit: Central Banking and the Planned Economy in Postwar France." Controlling Credit studies how the Banque de France used credit policy in the post-World War II era to influence the economy at a time when interest rates were not the leading policy instrument. For this first session we will cover the introduction and the part 1 of the book.

19 Jan 2022

Controlling Credit | Session 2

This is the second of two sessions to read and discuss Eric Monnet's "Controlling Credit: Central Banking and the Planned Economy in Postwar France." Controlling Credit studies how the Banque de France used credit policy in the post-World War II era to influence the economy at a time when interest rates were not the leading policy instrument. For this first session we will cover the part 2 of the book.

2 Feb 2022

The Menace of Fiscal QE

This session we are reading and discussing George Selgin's The Menace of Fiscal QE. "So far, QE has been a weapon for combating recession. But if certain politicians have their way, the Fed may be forced to use it not for macroeconomic purposes but to finance backdoor spending. That’s The Menace of Fiscal QE. In his brief but systematic study, George Selgin reviews the movement favoring fiscal QE, shows how it threatens both the Fed’s independence and democratic control of government spending, and counters claims that it offers a low-cost means for financing such spending." George Selgin is a senior fellow and director emeritus of the Center for Monetary and Financial Alternatives at the Cato Institute and Professor Emeritus of Economics at the University of Georgia. His research covers a broad range of topics within the field of monetary economics, including monetary history, macroeconomic theory, and the history of monetary thought.

23 Feb 2022

The New Lombard Street | Session 1

This is the first of three sessions on Perry Mehrling's 2011 book The New Lombard Street: How the Fed Became the Dealer of Last Resort https://www.amazon.com/Money-Interest-Public-American-1920-1970/dp/0674584309/ In this book, Mehrling applies his Money View framework to interpret the history of the Fed and to make sense of the global financial crisis of 2007-2009. Walter Bagehot's Lombard Street, published in 1873 in the wake of a devastating London bank collapse, explained in clear and straightforward terms why central banks must serve as the lender of last resort to ensure liquidity in a faltering credit system. Bagehot's book set down the principles that helped define the role of modern central banks, particularly in times of crisis--but the recent global financial meltdown has posed unforeseen challenges. The New Lombard Street lays out the innovative principles needed to address the instability of today's markets and to rebuild our financial system. This week, we discuss the introduction as well as chapters 1 and 2.

9 Mar 2022

The New Lombard Street | Session 2

This is the second of three sessions on Perry Mehrling's 2011 book The New Lombard Street: How the Fed Became the Dealer of Last Resort https://www.amazon.com/Money-Interest-Public-American-1920-1970/dp/0674584309/ In this book, Mehrling applies his Money View framework to interpret the history of the Fed and to make sense of the global financial crisis of 2007-2009. Walter Bagehot's Lombard Street, published in 1873 in the wake of a devastating London bank collapse, explained in clear and straightforward terms why central banks must serve as the lender of last resort to ensure liquidity in a faltering credit system. Bagehot's book set down the principles that helped define the role of modern central banks, particularly in times of crisis--but the recent global financial meltdown has posed unforeseen challenges. The New Lombard Street lays out the innovative principles needed to address the instability of today's markets and to rebuild our financial system. This week, we discuss chapters 3 and 4.

23 Mar 2022

The New Lombard Street | Session 3

This is the last of three sessions on Perry Mehrling's 2011 book The New Lombard Street: How the Fed Became the Dealer of Last Resort https://www.amazon.com/Money-Interest-Public-American-1920-1970/dp/0674584309/ In this book, Mehrling applies his Money View framework to interpret the history of the Fed and to make sense of the global financial crisis of 2007-2009. Walter Bagehot's Lombard Street, published in 1873 in the wake of a devastating London bank collapse, explained in clear and straightforward terms why central banks must serve as the lender of last resort to ensure liquidity in a faltering credit system. Bagehot's book set down the principles that helped define the role of modern central banks, particularly in times of crisis--but the recent global financial meltdown has posed unforeseen challenges. The New Lombard Street lays out the innovative principles needed to address the instability of today's markets and to rebuild our financial system. This week, we discuss chapters 5 and 6 as well as the conclusion.

20 Apr 2022

Fighting Financial Crises | Session 1

This is the first of two sessions to discuss "Fighting Financial Crises: Learning from the Past" by Gary Gorton and Ellis Tallman. We will cover chapters 1-6 this first session. From the back cover:"If you’ve got money in the bank, chances are you’ve never seriously worried about not being able to withdraw it. But there was a time in the United States, an era that ended just over a hundred years ago, when bank customers had to pay close attention to the solvency of the banking system, knowing they might have to rush to retrieve their savings before the bank collapsed. During the National Banking Era (1863–1913), before the establishment of the Federal Reserve, widespread banking panics were indeed rather common. Yet these pre-Fed banking panics, as Gary B. Gorton and Ellis W. Tallman show, bear striking similarities to our recent financial crisis. Fighting Financial Crises thus turns to the past to better understand our uncertain present, investigating how panics during the National Banking Era played out and how they were eventually quelled and prevented. The authors then consider the Fed’s and the SEC’s reactions to the recent crisis, building an informative new perspective on how the modern economy works."

11 May 2022

Fighting Financial Crises | Session 2

This is the second of two sessions to discuss "Fighting Financial Crises: Learning from the Past" by Gary Gorton and Ellis Tallman. We will cover chapters 7-12 this last session. From the back cover:"If you’ve got money in the bank, chances are you’ve never seriously worried about not being able to withdraw it. But there was a time in the United States, an era that ended just over a hundred years ago, when bank customers had to pay close attention to the solvency of the banking system, knowing they might have to rush to retrieve their savings before the bank collapsed. During the National Banking Era (1863–1913), before the establishment of the Federal Reserve, widespread banking panics were indeed rather common. Yet these pre-Fed banking panics, as Gary B. Gorton and Ellis W. Tallman show, bear striking similarities to our recent financial crisis. Fighting Financial Crises thus turns to the past to better understand our uncertain present, investigating how panics during the National Banking Era played out and how they were eventually quelled and prevented. The authors then consider the Fed’s and the SEC’s reactions to the recent crisis, building an informative new perspective on how the modern economy works."

25 May 2022

Money and Empire | Session 1

This is the first of two sessions to discuss "Money and empire: The international gold standard, 1890-1914" by Marcello De Cecco. We will cover chapters 1-4 this session. From a published review: "The author, a Professor of International Economics at the University of Siena, Italy, finds highly abstract theoretical explanations of the international gold standard to be deficient. He thinks that these treatments do not adequately explain how the standard worked during its heyday from 1890 until 1914, in part because they fail to identify how it came to be and how it came apart. So the idea that moves this book along is that to understand an economic system, in this case a financial and monetary system, one must study it within its place and time-within history. De Cecco's theoretical theme is that the international gold standard was in fact a sterling standard; to the extent that it functioned well, this was because of Britain's dominance of international financial flows. The seeds of the gold standard's demise, de Cecco argues, are found in Britain's decline as an industrial and financial power".

15 Jun 2022

Money and Empire | Session 2

This is the second session to discuss "Money and empire: The international gold standard, 1890-1914" by Marcello De Cecco. We will cover chapters 5-7 this session. From a published review: "The author, a Professor of International Economics at the University of Siena, Italy, finds highly abstract theoretical explanations of the international gold standard to be deficient. He thinks that these treatments do not adequately explain how the standard worked during its heyday from 1890 until 1914, in part because they fail to identify how it came to be and how it came apart. So the idea that moves this book along is that to understand an economic system, in this case a financial and monetary system, one must study it within its place and time-within history. De Cecco's theoretical theme is that the international gold standard was in fact a sterling standard; to the extent that it functioned well, this was because of Britain's dominance of international financial flows. The seeds of the gold standard's demise, de Cecco argues, are found in Britain's decline as an industrial and financial power".

22 Jun 2022

Central Bank Cooperation 1924-31 | Stephen Clarke | Part 1

This week, we will discuss the first 5 chapters of the 1967 monograph by Stephen Clarke. Access it here:https://fraser.stlouisfed.org/files/docs/meltzer/clacen67.pdf?utm_source=direct_download Dramatis Personae 10 1- Introduction 15 2. The Problems of 1924-31 18Economic Difficulties 18Political Tensions 21Temporary Solutions 22Trouble Spots 23The Economic Breakdown 24 3. The Role of Central BankCooperation 27Introduction 27The Gold Standard Conception ofCentral Bank Cooperation 27Central Banks as Instruments ofNational Policy 29The Debate on Central BankCooperation 33The Genoa proposals 34Strong's critique of theGenoa proposals 36A Pragmatic Approach to CentralBank Cooperation 40 4. The Bankers' Role in the Stabilization of the German Mark: 1924 45Introduction 45Cooperative Aspects 48Political and economic conditionsfor the Dawes Loan 50The transfer committee andthe agent general 56Competitive Aspects:Dollars or Sterling? 58The Gold Discount Bank 58The Reichsbank's internationalreserves 60Final Negotiations for theDawes Loan 67 5. Britain's Return to Gold 71Introduction 71The Objectives of Anglo-AmericanCooperation 72The Strategy of Cooperation 75Timing 78Implementing the Strategy 81The Federal Reserve andMorgan credits 81Coordination of monetary policy .. 85Consolidating Sterling's Position 96The Unfinished Task of International Economic Cooperation 105

6 Jul 2022

Central Bank Cooperation 1924-31 | Stephen Clarke | Part 2

This we discuss the remaining chapters of Stephen Clarke's monograph. Access it here: https://fraser.stlouisfed.org/files/docs/meltzer/clacen67.pdf?utm_source=direct_download 6. The Defense of a Key Currency:1926-28 108Introduction 108Payments Surpluses ComplicateMonetary Policy 109Germany 109France 110The Shift toward Gold 112Germany 112France 115British-French Accommodation 119The Central Bankers' Meeting ofJuly 1927 123The Easing of Federal ReservePolicy 124The Payments Balance Shifts inFavor of Europe 127The Liquidation of the Federal Reserve's Sterling Balance and the Shifting of the Demand for Gold to NewYork 130The International Financial SystemBecomes More Rigid 134Inadequate Efforts to ButtressSterling 139Conclusion 141 7. Mounting StrainsDeclining Cooperation 144The Reparation Settlement 145Strains During the Boom:July 1928-October 1929 147International imbalance 147Difficulties of cooperation 150The role of the Bank of France ... 164False Hopes: November 1929-June 1930 168Strains During the Depression:July 1930-May 1931 , 171Deterioration 171Central bank cooperation: muchactivity; little accomplished 173 8. The 1931 Crisis 182Introduction 182Germany at Loggerheads withFrance 183Central Bank Cooperation: HalfMeasures to Support Austria andGermany 185Supporting the Austrian schilling.. 186The failure of efforts to supportthe reichsmark 189The Attack on Sterling 201The first attack 202Britain's response 203Central bank credits to theBank of England 204The bankers' loan to theBritish government 209The final onslaught 213Epilogue 218 9. Conclusion 220

27 Jul 2022

The Money Problem | Session 1

This is the first of two sessions for reading and discussing Morgan Ricks' book The Money Problem. In this session we will cover the Introduction and Part 1 (through chapter 4). From the jacket:"Years have passed since the world experienced one of the worst financial crises in history, and while countless experts have analyzed it, many central questions remain unanswered. Should money creation be considered a ‘public’ or ‘private’ activity―or both? What do we mean by, and want from, financial stability? What role should regulation play? How would we design our monetary institutions if we could start from scratch?"

10 Aug 2022

The Money Problem | Session 2

This is the second of two sessions for reading and discussing Morgan Ricks' book The Money Problem. In this session we will cover the Part 2 and Part 3. From the jacket:"Years have passed since the world experienced one of the worst financial crises in history, and while countless experts have analyzed it, many central questions remain unanswered. Should money creation be considered a ‘public’ or ‘private’ activity―or both? What do we mean by, and want from, financial stability? What role should regulation play? How would we design our monetary institutions if we could start from scratch?"

17 Aug 2022

The Money Problem | Discussion with Morgan Ricks

After reading Morgan Ricks' The Money Problem, Professor Ricks will join us to discuss the book. Morgan Ricks is a Professor of Law at Vanderbilt University where he studies financial regulation. He is the author of The Money Problem: Rethinking Financial Regulation (University of Chicago Press, 2016), which offers a blueprint for a modernized system of money and banking that can be established through incremental change. Professor Ricks joined the Vanderbilt Law faculty in 2012 and was the 2019-21 Enterprise Scholar. Before he entered the legal academy, he was a senior policy advisor and financial restructuring expert at the U.S. Treasury Department from 2009 to 2010, where he focused primarily on financial stability initiatives and capital markets policy. Before joining the Treasury Department, he was a risk-arbitrage trader at Citadel Investment Group, a Chicago-based hedge fund. He previously served as a vice president in the investment banking division of Merrill Lynch & Co., where he specialized in strategic and capital-raising transactions for financial services companies. He began his career as a mergers and acquisitions attorney at Wachtell Lipton Rosen & Katz.

24 Aug 2022

The Evolution of Central Banking | Session 1

This is the first out of three sessions devoted to Stafano Ugolini's book "The Evolution of Central Banking: Theory and History". We will be discussing the introduction and Chapter 1: The Payment System. Book's description: This book is the first complete survey of the evolution of monetary institutions and practices in Western countries from the Middle Ages to today. It radically rethinks previous attempts at a history of monetary institutions by avoiding institutional approach and shifting the focus away from the Anglo-American experience. Previous histories have been hamstrung by the linear, teleological assessment of the evolution of central banks. Free from such assumptions, Ugolini’s work offers bankers and policymakers valuable and profound insights into their institutions. Using a functional approach, Ugolini charts an historical trajectory longer and broader than any other attempted on the subject. Moving away from the Anglo-American perspective, the book allows for a richer (and less biased) analysis of long-term trends. The book is ideal for researchers looking to better understand the evolution of the institutions that underlie the global economy.

7 Sep 2022

The Evolution of Central Banking | Session 2

This is the second out of three sessions devoted to Stafano Ugolini's book "The Evolution of Central Banking: Theory and History". We will be discussing Chapter 2 (Lender of Last Resort and Supervision) and Chapter 3 (Issuing Money). Book's description: This book is the first complete survey of the evolution of monetary institutions and practices in Western countries from the Middle Ages to today. It radically rethinks previous attempts at a history of monetary institutions by avoiding institutional approach and shifting the focus away from the Anglo-American experience. Previous histories have been hamstrung by the linear, teleological assessment of the evolution of central banks. Free from such assumptions, Ugolini’s work offers bankers and policymakers valuable and profound insights into their institutions. Using a functional approach, Ugolini charts an historical trajectory longer and broader than any other attempted on the subject. Moving away from the Anglo-American perspective, the book allows for a richer (and less biased) analysis of long-term trends. The book is ideal for researchers looking to better understand the evolution of the institutions that underlie the global economy.

21 Sep 2022

The Evolution of Central Banking | Session 3

This is the final session devoted to Stafano Ugolini's book "The Evolution of Central Banking: Theory and History". We will be discussing Chapter 4: Monetary Policy and the conclusion. Book's description: This book is the first complete survey of the evolution of monetary institutions and practices in Western countries from the Middle Ages to today. It radically rethinks previous attempts at a history of monetary institutions by avoiding institutional approach and shifting the focus away from the Anglo-American experience. Previous histories have been hamstrung by the linear, teleological assessment of the evolution of central banks. Free from such assumptions, Ugolini’s work offers bankers and policymakers valuable and profound insights into their institutions. Using a functional approach, Ugolini charts an historical trajectory longer and broader than any other attempted on the subject. Moving away from the Anglo-American perspective, the book allows for a richer (and less biased) analysis of long-term trends. The book is ideal for researchers looking to better understand the evolution of the institutions that underlie the global economy.

28 Sep 2022

A Money View of DeFi

This discussion will focus on the article The Crypto Banking System, which dives into the required foundations to build a financial system on top of decentralized finance (DeFi). The work illustrates through balance sheets how institutions would be interconnected, building on Zoltan Pozsar’s mapping of the Shadow Banking System (see here and here) We will be joined by the article’s author, Sébastien Derivaux. Sébastien Derivaux is ALM Analyst at MakerDAO. MakerDAO is the leading lending protocol in DeFi and the issuer of the $-pegged DAI stablecoin, the leading decentralized stablecoin (>$6B market cap). Sébastien focuses on bridging the gap between DeFi and TradFi. working both on asset-liability management and investing the balance sheet into Real-World Asset (currently bonds). Prior to joining MakerDAO, Sébastien worked as head of financial planning and analysis for an insurance company. He holds a PhD in Data Science from Strasbourg University

5 Oct 2022

The Evolution of Central Banking | Q&A Session with Stefano Ugolini

This is an event which will conclude our discussion of Stefano Ugolini's book "The Evolution of Central Banking". It will take a form of an one-hour Q&A session with professor Ugolini himself.

19 Oct 2022

A Financial History of Western Europe | Part 1 — Money

This is the first of five sessions on Charles P. Kindleberger's 1993 (1984) book A Financial History of Western Europe. From the Dust Jacket: Charles Kindleberger highlights the development of financial institutions to meet emerging needs, and the similarities and contrasts in the handling of financial problems such as transferring resources from one country to another, stimulating investment or financing war and cleaning up the resulting monetary mess. The first half of the book covers money, banking and finance from about 1450 to 1913; the second deals in considerably more detail with the twentieth century. In his latest book, "Charles P. Kindleberger and the Dollar System," Perry Mehrling says: "In Charlie's mind, this book was to be his culminating treatise on international money, and, if we want to understand it, that is how we must attempt to read it." There are two editions of this book, which are fairly similar. We will organize our discussion around the 1993 second edition, but it's fine to participate with the 1984 first edition. This week, we discuss the introduction chapter as well as the three chapters in Part 1: Money. Chapter 2: The Evolution of Money in Western Europe Chapter 3: Bank Money Chapter 4: Bimetallism and the Emergence of the Gold Standard

2 Nov 2022

A Financial History of Western Europe | Part 2 — Banking

This is the second of five sessions on Charles P. Kindleberger's 1993 (1984) book A Financial History of Western Europe. From the Dust Jacket: Charles Kindleberger highlights the development of financial institutions to meet emerging needs, and the similarities and contrasts in the handling of financial problems such as transferring resources from one country to another, stimulating investment or financing war and cleaning up the resulting monetary mess. The first half of the book covers money, banking and finance from about 1450 to 1913; the second deals in considerably more detail with the twentieth century. In his latest book, "Charles P. Kindleberger and the Dollar System," Perry Mehrling says: "In Charlie's mind, this book was to be his culminating treatise on international money, and, if we want to understand it, that is how we must attempt to read it." There are two editions of this book, which are fairly similar. We will organize our discussion around the 1993 second edition, but it's fine to participate with the 1984 first edition. This week, we discuss the four chapters in Part 2: Banking. Chapter 5: English and Scottish Banking Chapter 6: French Banking Chapter 7: German Banking Chapter 8: Italian and Spanish Banking

16 Nov 2022

A Financial History of Western Europe | Part 3 — Finance

This is the third of five sessions on Charles P. Kindleberger's 1993 (1984) book A Financial History of Western Europe. From the Dust Jacket: Charles Kindleberger highlights the development of financial institutions to meet emerging needs, and the similarities and contrasts in the handling of financial problems such as transferring resources from one country to another, stimulating investment or financing war and cleaning up the resulting monetary mess. The first half of the book covers money, banking and finance from about 1450 to 1913; the second deals in considerably more detail with the twentieth century. In his latest book, Charles P. Kindleberger and the Dollar System, Perry Mehrling says: "In Charlie's mind, this book was to be his culminating treatise on international money, and, if we want to understand it, that is how we must attempt to read it." There are two editions of this book, which are fairly similar. We will organize our discussion around the 1993 second edition, but it's fine to participate with the 1984 first edition. This week, we discuss the seven chapters in Part 3: Finance. Chapter 9: Government Finance Chapter 10: Private Finance—Individuals and Families Chapter 11: Private Finance—The Corporation Chapter 12: Foreign Investment—Dutch, British, French, and German Experience to 1914 Chapter 13: Transfer Cases Chapter 14: Foreign Lending—Political and Analytical Aspects Chapter 15: Financial Crises

30 Nov 2022

Money and Empire: Charles P. Kindleberger and the Dollar System | Part 1

In this book, Perry Mehrling traces the evolution of Charles P. Kindleberger's thinking in the context of a 'key-currency' approach to the rise of the dollar system, here revealed as the indispensable framework for global economic development since World War II. In this first session we will discuss: Introduction Part I: Intellectual Formation, 1910-1948Ch. 1: Golden BoyCh. 2: ColumbiaCh. 3: Hot MoneyCh. 4: A Good War In the next session, we will discuss: Part II: International Economist, 1948-1976Ch. 5 TechCh. 6 The Dollar SystemCh. 7 Among Economists Part III: Historical Economist, 1976-2003Ch. 8 IndepenceCh. 9 Chef d'OuvreCh. 10 Leadership

14 Dec 2022

Money and Empire: Charles P. Kindleberger and the Dollar System | Part 2

In this book, Perry Mehrling traces the evolution of Charles P. Kindleberger's thinking in the context of a 'key-currency' approach to the rise of the dollar system, here revealed as the indispensable framework for global economic development since World War II. In this second session we will discuss: Part II: International Economist, 1948-1976Ch. 5 TechCh. 6 The Dollar SystemCh. 7 Among Economists

11 Jan 2023

A Financial History of Western Europe | Part 4 — The Interwar Period

This is the fourth of five sessions on Charles P. Kindleberger's 1993 (1984) book A Financial History of Western Europe. From the Dust Jacket: Charles Kindleberger highlights the development of financial institutions to meet emerging needs, and the similarities and contrasts in the handling of financial problems such as transferring resources from one country to another, stimulating investment or financing war and cleaning up the resulting monetary mess. The first half of the book covers money, banking and finance from about 1450 to 1913; the second deals in considerably more detail with the twentieth century. In his latest book, Charles P. Kindleberger and the Dollar System, Perry Mehrling says: "In Charlie's mind, this book was to be his culminating treatise on international money, and, if we want to understand it, that is how we must attempt to read it." There are two editions of this book, which are fairly similar. We will organize our discussion around the 1993 second edition, but it's fine to participate with the 1984 first edition. This week, we discuss the six chapters in Part 4: The Interwar Period. Chapter 16: War Finance, Reparations, War Debts Chapter 17: German Postwar Inflation Chapter 18: The Restoration of the Pound to Par Chapter 19: Stabilization of the Franc Chapter 20: The 1929 Depression Chapter 21: The 1930s

18 Jan 2023

A Financial History of Western Europe | Part 5 — After World War II

This is the last of five sessions on Charles P. Kindleberger's 1993 (1984) book A Financial History of Western Europe. From the Dust Jacket: Charles Kindleberger highlights the development of financial institutions to meet emerging needs, and the similarities and contrasts in the handling of financial problems such as transferring resources from one country to another, stimulating investment or financing war and cleaning up the resulting monetary mess. The first half of the book covers money, banking and finance from about 1450 to 1913; the second deals in considerably more detail with the twentieth century. In his latest book, Charles P. Kindleberger and the Dollar System, Perry Mehrling says: "In Charlie's mind, this book was to be his culminating treatise on international money, and, if we want to understand it, that is how we must attempt to read it." There are two editions of this book, which are fairly similar. We will organize our discussion around the 1993 second edition, but it's fine to participate with the 1984 first edition. This week, we discuss the four chapters in Part 5: After World War II. Chapter 22: German Finance in and After World War II Chapter 23: Lend-Lease, the British Loan, the Marshall Plan Chapter 24: European Financial Integration Chapter 25: Europe in the World Financial System This final part of the book contains the most differences between the first and second editions of the book. Chapter 24 is partly reorganized and rewritten in the second edition. Chapter 25 is new.

21 Dec 2022

Money and Empire: Charles P. Kindleberger and the Dollar System | Part 3

In this book, Perry Mehrling traces the evolution of Charles P. Kindleberger's thinking in the context of a 'key-currency' approach to the rise of the dollar system, here revealed as the indispensable framework for global economic development since World War II. In this third session we will discuss: Part III: Historical Economist, 1976-2003Ch. 8 IndepenceCh. 9 Chef d'OuvreCh. 10 Leadership

21 Dec 2022

Money and Empire: Discussion with Perry Mehrling

In this session Perry Mehrling, author of "Money and Empire - Charles P. Kindleberger and the Dollar System" comes to visit the reading group to answer our questions and engage with reactions to his work.

4 Jan 2023

Money and Empire: Discussion with Perry Mehrling #2

In this session Perry Mehrling, author of "Money and Empire - Charles P. Kindleberger and the Dollar System" again comes to visit the reading group to answer our questions and engage with reactions to his work.

15 Feb 2023

Bonds Without Borders | Session 1

This is the first of two sessions on Chris O'Malley's 2015 Book Bonds Without Borders: A History of the Eurobond Market. https://www.amazon.com/Bonds-without-Borders-History-Eurobond/dp/1118843886 From the Dust Jacket: Bonds Without Borders tells the extraordinary story of how the [Eurobond] market developed into the principal source of international finance for sovereign states, supranational agencies, financial institutions and companies around the world. This week, we discuss through the first five chapters. Introduction: Fifty Years of the Eurobond MarketChapter 1: Before the Beginning — To 1962Chapter 2: Building the Base — 1963-1969Chapter 3: Oil and Turmoil — 1970-1979Chapter 4: Masters of the — 1979-1984Chapter 5: Going Global — 1985-1989

1 Mar 2023

Bonds Without Borders | Session 2

This is the second of two sessions on Chris O'Malley's 2015 Book Bonds Without Borders: A History of the Eurobond Market. https://www.amazon.com/Bonds-without-Borders-History-Eurobond/dp/1118843886 From the Dust Jacket: Bonds Without Borders tells the extraordinary story of how the [Eurobond] market developed into the principal source of international finance for sovereign states, supranational agencies, financial institutions and companies around the world. This week, we discuss Chapter 6 through the end of the book. Chapter 6: The Derivatives Dash — 1990-1995 Chapter 7: Convergence and Credit — 1995-1999 Chapter 8: Of .Com's and Cons — 1999-2004 Chapter 9: Mark-to-Model — 2004-2007 Chapter 10: Busts and Bailouts — 2007-2010 Chapter 11: Sinking Sovereigns — 2011-2013 Postscript

15 Mar 2023

Monetary Policy Operations and the Financial System | Session 1

This is the first session when we will cover Ulrich Bindseil's 2014 book "Monetary Policy Operations and the Financial System". We will focus on chapters 1-8, covering the first 100 pages (roughly a third) of the book. From the bookseller's description:"Since 2007, central banks of industrialized countries have counteracted financial instability, recession, and deflationary risks with unprecedented monetary policy operations. While generally regarded as successful, these measures also led to an exceptional increase in the size of central bank balance sheets. The book first introduces the subject by explaining monetary policy operations in normal times, including the key instruments (open market operations, standing facilities, reserve requirements, and the collateral framework). Second, the book reviews the basic mechanics of financial crises as they have hit economies many times. The book then explains what central banks need to do to when financial markets and banks are impaired to fulfil their monetary policy and financial stability mandates. Besides demonstrating the need for non-conventional monetary policy measures, the book also highlights their dangers, such as moral hazard and increased central bank risk taking. The book draws a number of lessons from the crisis on non-conventional monetary policy operations, assessing what measures have worked well, and how a framework should be designed in future normal times such as to contribute to make financial crises less likely."