Central banks run out of road

Eight years after the crisis, the economic recovery has yet to lift off properly, and central banks are looking more clueless and desperate than ever.

Last weekend central bankers gathered for their annual symposium in Jackson Hole, 7,000 feet up in the mountains of Wyoming. Many people wish they'd never come back down, says The Economist. Eight years after the crisis, the economic recovery has yet to lift off properly, and central banks are looking more clueless and desperate than ever.

After injecting printed money into the economy by buying bonds, central banks have embarked on more extreme policies. Negative interest rates now apply in countries comprising a quarter of the world economy, says Liam Halligan in The Spectator. Private-sector banks in these countries now have to pay the central bank to leave money with them. The hope was that this would spur banks to lend. But it squeezes their profit margins, and banks are loath to pass on the hit because people could withdraw money. Banks and other financial institutions are now considering keeping cash in vaults to avoid charges. "Could any satirist... have envisaged this?" asks The New Statesman's Peter Wilby.

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Andrew Van Sickle
Editor, MoneyWeek

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.