The US Federal Reserve's growing list of policymaking, supervisory, and communications failures is becoming increasingly consequential not just for Americans but also for the rest of the world. The global economy's single most important institution has lost its way and must urgently address two structural deficiencies.
CAMBRIDGE – Reacting to Silicon Valley Bank’s sudden collapse, André Esteves, a senior Brazilian banking executive, recently told Bloomberg that “SVB’s interest rate risk would’ve been obvious to any banking intern in Latin America.” To some, this remark will sound rather rich coming from a region that has had no shortage of banking-sector problems. Nonetheless, Esteves’s sentiment is revealing, because it reflects mounting concerns around the world about the US Federal Reserve’s policymaking and its adverse spillover effects on other countries.
CAMBRIDGE – Reacting to Silicon Valley Bank’s sudden collapse, André Esteves, a senior Brazilian banking executive, recently told Bloomberg that “SVB’s interest rate risk would’ve been obvious to any banking intern in Latin America.” To some, this remark will sound rather rich coming from a region that has had no shortage of banking-sector problems. Nonetheless, Esteves’s sentiment is revealing, because it reflects mounting concerns around the world about the US Federal Reserve’s policymaking and its adverse spillover effects on other countries.