The original cause of the Icelandic crisis was a combination of inappropriate monetary policy and an outsized banking system.
This might be because in banking and monetary-policy circles, Mr Trichet's reputation remains high.
U.S. retail sales data, industrial output in China and the euro area, the ongoing Spanish banking crisis and possible further monetary policy easing in Japan will all be overshadowed by the Greek elections, said Nomura Securities analysts in a 16 page report on Friday.
The asset expansion has produced a sharp rise in bank reserves, and hence the monetary base, which is composed of bank reserves and currency outside the banking system.
It directly reduces the size of the monetary base and the funds available to the banking system for lending.
FORBES: Addressing The Fallacious Views Of Contemptuous Keynesians
In many countries short-term interest rates are near zero and in a banking crisis monetary policy works less well.
Also, monetary policy liberalization and increased competition in the banking system will be key to improving credit and capital access for dynamic private companies.
It was here that the unelected, largely unknown and unaccountable nabobs of central banking actually began to fix the global monetary system in a series of ad hoc and highly irregular deals with each other.
Germany's low inflation rate, its limited room to ease monetary or fiscal policy and the problems in its banking system look horribly like the early symptoms seen in Japan in the mid-1990s before it sank into deflation.
The three key elements of this policy remained the adoption of a floating exchange rate system, the anchoring of monetary policy to the inflation target and the acceleration of banking sector reforms, he said.
Earlier this year Cyprus agreed a 10bn euro bailout with the EU and the International Monetary Fund (IMF) after its banking sector faced near collapse.
BBC: Slovenia unveils reforms as it seeks to avoid EU bailout
The implicit assumption in monetary circles is that there is no alternative to central banking and fiat money.
FORBES: End the Fed: More than Just a Bumper Sticker Slogan?
They believe in fact the US economy was so busted by the banking crisis of 2008 that only a further monetary and fiscal stimulus will revive it.
Since then, two of those countries, Latvia and Cyprus, have needed financial aid from the EU and International Monetary Fund, while Slovenia is restructuring its ailing banking system to avoid requesting a bailout.
With murmurs at the FOMC growing louder every time the Fed Chairman and his acolytes express support for ultra-loose monetary policy and continued quantitative easing, Ben Bernanke faced the Senate Banking Committee where he once again defended his tenure as central bank chief.
FORBES: Bernanke Admits QE Distorts Markets, Brags Of 'Best' Inflation Record As Fed Chairman
Of course, all the people in banking and finance, not to mention the overlords of the monetary system at the central banks, would absolutely hate it.
FORBES: The Unintended Consequences Of The Greatest Economic Experiment
Federal Reserve Chairman Ben Bernanke will deliver his monetary policy report to Congress, first to the Senate Banking Committee on Tuesday and then to the House Financial Services Committee on Wednesday.
It appears Cypriot officials are considering taxing savings accounts in their domestic banks as a part of an overall banking bailout plan with the European Central Bank and the International Monetary Fund.
FORBES: A.M. Kitco Metals Roundup: Gold Up on Fresh Safe-Haven Demand; EU Worries Resurface
The first is that stockmarket crashes need not wreak havoc, if central banks relax monetary policy at the right time and by the right amount, and if dangers of banking-system collapses are spotted early.
The banking system is gradually healing and the housing market is recovering, while global monetary policy remains extremely accommodative.
FORBES: The Small-Cap Contrarian Bull Case And 4 Stocks To Play It
To create a fiscal and banking union without a political union would multiply the original mistakes in the creation of a monetary union.
Key monetary policy operations, such as the LTRO, are working directly through their effects on the banking system and are providing support to large numbers of weak banks.
FORBES: Euro Area Banking Union: Should Bank Supervision and Monetary Policy Be Separated?
In the next years, if the European Union manages to think out of the box and to adopt original measures to reinforce the governance of the eurozone, such as the undergoing banking union and the announced fiscal and political unions, the original misconceptions of the European Monetary Union (EMU) will be fixed.
FORBES: Europe : Getting The Nobel Peace Prize And Preparing For The Nobel Prize In Economics?
For example, the usage of virtual currencies, online bartering marketplaces, and time banking brokers that match skills to needs and allow prices to be set mutually and in non-monetary units.
Both said that monetary and fiscal authorities should outline how they will step back from the rev-it-up policies since the global banking crisis, in order to achieve sustained, noninflationary growth (i.e. no bubbles).
This is a serious structural issue with the way that the European monetary system was constructed: the ECB is tasked only with guarding inflation, and not with ensuring the health of the banking system.
"In the case of Indonesian banks in Singapore, this will be by way of a broader provision of financial services, both in wholesale banking and to, for example, Indonesian students and work permit holders in Singapore, " the Monetary Authority of Singapore said in a statement.
应用推荐