Pauline von Hellermann
@pvonhellermannn@mastodon.green  ·  activity timestamp 2 years ago
Pauline von Hellermann
@pvonhellermannn@mastodon.green  ·  activity timestamp 2 years ago
Pauline von Hellermann
@pvonhellermannn@mastodon.green  ·  activity timestamp 2 years ago
Pauline von Hellermann
@pvonhellermannn@mastodon.green  ·  activity timestamp 2 years ago
Pauline von Hellermann
@pvonhellermannn@mastodon.green  ·  activity timestamp 2 years ago
There should be public outrage: the APF's winners are private banks, whose pre-tax profits in the first nine months of 2023 reached £41bn, roughly the amount received from the APF and nearly double on the previous year, at a time when Britain endures the longest hit to living standards since records began. In turn, Bailey has refused to change the APF mechanics, holding up the totem of central bank independence that terrifies politicians. But this is not a matter of independence. The Treasury pays the Bank by choice and institutional design, with no solid theoretical justification. The Bank could simply follow the established practice at other large central banks who bear the costs of paying interest on reserves. That the Bank chooses otherwise points to the bigger stakes here: Britain is going through an extreme version of what the political theorist Wendy Brown called "undoing the demos", where unelected technocrats in control over monetary-fiscal dynamics are chstructing future governments
There should be public outrage: the APF's winners are private banks, whose pre-tax profits in the first nine months of 2023 reached £41bn, roughly the amount received from the APF and nearly double on the previous year, at a time when Britain endures the longest hit to living standards since records began. In turn, Bailey has refused to change the APF mechanics, holding up the totem of central bank independence that terrifies politicians. But this is not a matter of independence. The Treasury pays the Bank by choice and institutional design, with no solid theoretical justification. The Bank could simply follow the established practice at other large central banks who bear the costs of paying interest on reserves. That the Bank chooses otherwise points to the bigger stakes here: Britain is going through an extreme version of what the political theorist Wendy Brown called "undoing the demos", where unelected technocrats in control over monetary-fiscal dynamics are chstructing future governments
There should be public outrage: the APF's winners are private banks, whose pre-tax profits in the first nine months of 2023 reached £41bn, roughly the amount received from the APF and nearly double on the previous year, at a time when Britain endures the longest hit to living standards since records began. In turn, Bailey has refused to change the APF mechanics, holding up the totem of central bank independence that terrifies politicians. But this is not a matter of independence. The Treasury pays the Bank by choice and institutional design, with no solid theoretical justification. The Bank could simply follow the established practice at other large central banks who bear the costs of paying interest on reserves. That the Bank chooses otherwise points to the bigger stakes here: Britain is going through an extreme version of what the political theorist Wendy Brown called "undoing the demos", where unelected technocrats in control over monetary-fiscal dynamics are chstructing future governments
But fiscal space is a political construct, as Liz Truss painfully learnt. Who you tax, how and what you spend, and how you defend yourself against the bond vigilantes policing your moves are all political choices, informed by ideological visions and constrained by institutional set-ups. The Bank of England's role is rarely visible, by design. The Bank is supposed to stay out of fiscal affairs. Yet its invisible hand is now depleting the Treasury coffers to boost commercial bank profits. This is the consequence of the institutional arrangement for quantitative easing, through the Asset Purchase Facility (APF) run by the Bank of England. Unique in the world, the APF has cost the UK Treasury around £38bn in 2023 and a projected £40bn in 2024. The Bank of England has projected that under the "optimistic scenario, the Treasury will pay the APF around 110bn throughout a 2025-2030 government, and net costs could reach £230bn by 2033, beyond Labour's wildest green spending dreams.
But fiscal space is a political construct, as Liz Truss painfully learnt. Who you tax, how and what you spend, and how you defend yourself against the bond vigilantes policing your moves are all political choices, informed by ideological visions and constrained by institutional set-ups. The Bank of England's role is rarely visible, by design. The Bank is supposed to stay out of fiscal affairs. Yet its invisible hand is now depleting the Treasury coffers to boost commercial bank profits. This is the consequence of the institutional arrangement for quantitative easing, through the Asset Purchase Facility (APF) run by the Bank of England. Unique in the world, the APF has cost the UK Treasury around £38bn in 2023 and a projected £40bn in 2024. The Bank of England has projected that under the "optimistic scenario, the Treasury will pay the APF around 110bn throughout a 2025-2030 government, and net costs could reach £230bn by 2033, beyond Labour's wildest green spending dreams.
But fiscal space is a political construct, as Liz Truss painfully learnt. Who you tax, how and what you spend, and how you defend yourself against the bond vigilantes policing your moves are all political choices, informed by ideological visions and constrained by institutional set-ups. The Bank of England's role is rarely visible, by design. The Bank is supposed to stay out of fiscal affairs. Yet its invisible hand is now depleting the Treasury coffers to boost commercial bank profits. This is the consequence of the institutional arrangement for quantitative easing, through the Asset Purchase Facility (APF) run by the Bank of England. Unique in the world, the APF has cost the UK Treasury around £38bn in 2023 and a projected £40bn in 2024. The Bank of England has projected that under the "optimistic scenario, the Treasury will pay the APF around 110bn throughout a 2025-2030 government, and net costs could reach £230bn by 2033, beyond Labour's wildest green spending dreams.
Home Login