show me something more confusing than accounting capital flows in the balance of payments - this, with due respect, is not helping. cc @jonsindreu @i_aldasoro…
in their first example, Chinese authorities have nothing to fear from Chinese residents moving their deposits to the US.

But of course, that is wrong, because down the line there will be a net loss of fx reserves for the Chinese banking system.
Example 2: US asset manager buys Kenyan corporate bond. There is literally no USD capital inflow in Kenya.

Helene Rey's global financial cycle obliterated out of existence.
how does one get CA deficits and capital account surpluses in this story? how do we get episodes of excessive appreciating pressure on domestic currencies related to large capital inflows?
in a sense, this is a profoundly conservative story of the dollar-based global financial system, where you dont need capital controls, where there is no Rey's dilemma (monetary policy autonomy vs free capital movements).
everything neatly balances out.

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More from @DanielaGabor

11 Jan
last year, @nssylla and I warned that France & G20 are planting budgetary time bombs in Africa through a conveyor belt that transfers their fiscal resources to institutional investors in the Global North.
news from Kenya today about one critical element of that conveyor belt - Public Private Partnerships through which state guarantees private profits.

The IMF estimated those derisking commitments to be around 8% of GDP in 2019 (and stressed this is a significant underestimate)
today, under IMF pressure (and as it finally joined the DSSI club), Kenyan Treasury accepted to include those PPP derisking commitment in public debt numbers

Read 6 tweets
10 Jan
Oh no, Starmer is repeating the Tory line on 'we are at concerning levels of public debt' #marr
and for those who think people like me ignore the 'market':

I'd say politicians have not caught up with the structural realities of financial markets where government debt has a 'macrofinancial' role rather different from standard 'fiscal' role

Read 4 tweets
2 Jan
hard to believe, but in the late 1940s, CDU, the party that gave Europe 'Schwarze null' and Schauble objected to central bank independence

instead it wanted 'an absolute coordination of policy between the central bank and the future state' (Mee 2019)
ahem, JC Trichet
The 1950 Bundesbank Law debate equated central bank independence with 'state within a state', capable of sacrificing employment for sound money. Familiar eh?
Read 6 tweets
31 Dec 20
This is clearly missing an 'Empire of Repo' book.
Empire of Repo: monetary plumbing in the age(s) of financial globalisation.
US version, with a bit more ooomph:

Empire of Repo

The Plumbers that changed the World of Finance.
Read 14 tweets
24 Dec 20
In his Macron Doctrine, @EmmanuelMacron promised a post-colonial, post-financialisation Afro-European Axis.

Yet, @nssylla & I show, in Africa, France pushes a 'development as derisking' paradigm that financialises development & privatises public goods.…
The #WallStreetConsensus is a new paradigm that frames development as a question of 'producing bankable projects' that can attract institutional investors.

Development asset classes = privatisation of social and physical infrastructure via PPPs.
But 'Development as Derisking' is not just about privatization. It rather seeks to transform the state, to reduce statecraft to derisking investments for global financiers. A bankable project is one where the state commits to put a safety net under investors.
Read 13 tweets
19 Dec 20
Wow we are badly governed.
We are badly governed: shit macroeconomic policies (we've maxed out the credit card), shit health policies (COVID19 is taking a Xmas break), shit Brexit (Dover truck queues) and shit climate policies (COP26 greenwashing coming your way next year)
And for those who can't do sarcasm at this joyful juncture, no there is no credit card except in the warped minds of the clowns in power
Read 5 tweets

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