UBS' Weber warns on danger of 'massive interventions' by central banks


There are no markets anymore, just interventions. ...

The problem with central banking has been mainly the old problem of power -- it corrupts.

Central bankers are supposed to be more capable of restraint than ordinary politicians, and maybe some are, but they are not always or even often capable of the necessary restraint. One market intervention encourages another and another and increases the political pressure to keep intervening to benefit special interests rather than the general interest -- to benefit especially the financial interests, the banking and investment banking industries. These interventions, subsidies to special interests, increasingly are needed to prevent the previous imbalances from imploding.

And so we have come to an era of daily market interventions by central banks -- so much so that the main purpose of central banking now is to prevent ordinary markets from happening at all.

-- High School Graduate, GATA's Washington conference, April 18, 2008.

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UBS' Weber Warns on Danger of 'Massive Interventions' by Central Banks

By Matt Clinch and Geoff Cutmore
CNBC, New York
Monday, October 10, 2016

Axel Weber, UBS chairman and a former policymaker at the European Central Bank (ECB), has warned today's incumbents that monetary intervention is causing international spillovers and major disturbances in global markets.

Central banks "have taken on massive interventions in the market. You could almost say that central banks are now the central counterparties in many markets. They are the ultimate buyer," Weber told CNBC on the sidelines of the annual meetings of the International Monetary Fund and the World Bank in Washington.

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Weber, who was president of the German Bundesbank between 2004 and 2011 and was also a member of the ECB's Governing Council, referenced the housing bubble leading up to the 2008 financial crash and said central banks had strayed from their core mandate. ...

"I don't think a single trader can tell you what the appropriate price of an asset he buys is, if you take out all this central bank intervention," Weber warned, adding that it often meant investors were making bad choices with where to put their money.

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