Who Controls The Money- An Unelected_ Unaccountable Central Bank Of The World by JeremiahProphet


									Who Controls The Money? An Unelected,
Unaccountable Central Bank Of The World
Michael Snyder
Economic Collapse
Feb 6, 2013

An immensely powerful international organization that most people have never even heard of
secretly controls the money supply of the entire globe. It is called the Bank for International
Settlements, and it is the central bank of central banks. It is located in Basel, Switzerland, but it
also has branches in Hong Kong and Mexico City. It is essentially an unelected, unaccountable
central bank of the world that has complete immunity from taxation and from national laws.
Even Wikipedia admits that “it is not accountable to any single national government.“ The Bank
for International Settlements was used to launder money for the Nazis during World War II, but
these days the main purpose of the BIS is to guide and direct the centrally-planned global
financial system. Today, 58 global central banks belong to the BIS, and it has far more power
over how the U.S. economy (or any other economy for that matter) will perform over the course
of the next year than any politician does. Every two months, the central bankers of the world
gather in Basel for another “Global Economy Meeting”. During those meetings, decisions are
made which affect every man, woman and child on the planet, and yet none of us have any say in
what goes on. The Bank for International Settlements is an organization that was founded by the
global elite and it operates for the benefit of the global elite, and it is intended to be one of the
key cornerstones of the emerging one world economic system. It is imperative that we get people
educated about what this organization is and where it plans to take the global economy.

Sadly, only a very small percentage of people actually know what the Bank for International
Settlements is, and even fewer people are aware of the Global Economy Meetings that take place
in Basel on a bi-monthly basis.

These Global Economy Meetings were discussed in a recent article in the Wall Street Journal…

Every two months, more than a dozen bankers meet here on Sunday evenings to talk and dine on
the 18th floor of a cylindrical building looking out on the Rhine.

The dinner discussions on money and economics are more than academic. At the table are the
chiefs of the world’s biggest central banks, representing countries that annually produce more
than $51 trillion of gross domestic product, three-quarters of the world’s economic output.

The article goes on to describe the room that these Global Economy Meetings are held in. It
sounds like something out of a novel…

The Bank of England’s Mr. King leads the dinner discussions in a room decorated by the Swiss
architectural firm Herzog & de Meuron, which designed the “Bird’s Nest” stadium for the
Beijing Olympics. The men have designated seats at a round table in a dining area scented by
white orchids and framed by white walls, a black ceiling and panoramic views.

The central bankers that gather for these meetings are not there just to socialize. No staff
members are allowed into these meetings, and they are conducted in an atmosphere of absolute

Serious matters follow appetizers, wine and small talk, according to people familiar with the
dinners. Mr. King typically asks his colleagues to talk about the outlook in their respective
countries. Others ask follow-up questions. The gatherings yield no transcripts or minutes. No
staff is allowed.

So the fate of the world economy is determined by unelected central bankers in secret meetings
that nobody ever hears about?

That certainly does not sound very “democratic”.

But this is the direction that “global governance” is taking us. The elite believe that the “big
decisions” are far too important to be left “to the people”, and so most of the “international
institutions” that have been established by the elite operate independently of the democratic

Sadly, the truth is that all of this has been planned for a very long time.

In a recent article entitled “Who Runs The World? Solid Proof That A Core Group Of Wealthy
Elitists Is Pulling The Strings“, I included a quote from Georgetown University history professor
Carroll Quigley from a book that he wrote all the way back in 1966 in which he discussed the big
plans that the elite had for the Bank for International Settlements…

[T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a
world system of financial control in private hands able to dominate the political system of each
country and the economy of the world as a whole. This system was to be controlled in a feudalist
fashion by the central banks of the world acting in concert, by secret agreements arrived at in
frequent private meetings and conferences. The apex of the system was to be the Bank for
International Settlements in Basle, Switzerland, a private bank owned and controlled by the
world’s central banks which were themselves private corporations.

Back then, the Bank for International Settlements was only just starting to play a major role in
global affairs. But over the years the BIS began to become increasingly important. The following
is an excerpt from an article by Ellen Brown…

For many years the BIS kept a very low profile, operating behind the scenes in an abandoned
hotel. It was here that decisions were reached to devalue or defend currencies, fix the price of
gold, regulate offshore banking, and raise or lower short-term interest rates. In 1977, however,
the BIS gave up its anonymity in exchange for more efficient headquarters. The new building has
been described as “an eighteen story-high circular skyscraper that rises above the medieval city
like some misplaced nuclear reactor.” It quickly became known as the “Tower of Basel.” Today
the BIS has governmental immunity, pays no taxes, and has its own private police force. It is, as
Mayer Rothschild envisioned, above the law.

Yes, it most definitely does bear a striking resemblance to the Tower of Babel as you can see
from the photo in this article. Once again the global elite are trying to unite humanity under a
single system, and that is most definitely not a good thing.

But many of these elitists are entirely convinced that “global governance” is what humanity
desperately needs. They even publicly tell us what they plan to do, but most people are not

For example, the following is an excerpt from a speech that former president of the European
Central Bank Jean-Claude Trichet delivered to the Council On Foreign Relations in New York…

In the area of central bank cooperation, the main forum is the Global Economy Meeting (GEM),
which gathers at the BIS headquarters in Basel. Over the past few years, this forum has included
31 governors as permanent members plus a number of other governors attending on a rotating
basis. The GEM, in which all systemic emerging economies’ Central Bank governors are fully
participating, has become the prime group for global governance among central banks.

The speech was entitled “Global Governance Today”, and you can find the full transcript right
here. But most people have never even heard that such a thing as a “Global Economy Meeting”
even exists because the mainstream media rarely discusses these sorts of things. They are too
busy focusing on the latest celebrity scandal or the latest cat fights between the Republicans and
the Democrats.

If you go to the official BIS website, the purposes of the organization sound fairly innocent and
quite boring…

The mission of the Bank for International Settlements (BIS) is to serve central banks in their
pursuit of monetary and financial stability, to foster international cooperation in those areas and
to act as a bank for central banks.

In broad outline, the BIS pursues its mission by:

      promoting discussion and facilitating collaboration among central banks;
      supporting dialogue with other authorities that are responsible for promoting financial stability;
      conducting research on policy issues confronting central banks and financial supervisory
      acting as a prime counterparty for central banks in their financial transactions; and
      serving as an agent or trustee in connection with international financial operations.

The head office is in Basel, Switzerland and there are two representative offices: in the Hong
Kong Special Administrative Region of the People’s Republic of China and in Mexico City.
But when you start looking into the details, things get much more interesting.

So exactly how does the BIS achieve “monetary and financial stability”? An article posted on
investorsinsight.com described how this is accomplished…

It accomplishes this through control of currencies. It currently holds 7% of the world’s available
foreign exchange funds, whose unit of account was switched in March of 2003 from the Swiss
gold franc to Special Drawing Rights (SDR), an artificial fiat “money” with a value based on a
basket of currencies (44% U.S. dollar, 34% euro, 11% Japanese yen, 11% pound sterling).

The bank also controls a huge amount of gold, which it both stores and lends out, giving it great
leverage over the metal’s price and the marketplace power that brings, since gold is still the only
universal currency. BIS gold reserves were listed on its 2005 annual report (the most recent) as
712 tons. How that breaks down into member banks’ deposits and the BIS personal stash is

By controlling foreign exchange currency, plus gold, the BIS can go a long way toward
determining the economic conditions in any given country. Remember that the next time Ben
Bernanke or European Central Bank President Jean-Claude Trichet announces an interest rate
hike. You can bet it didn’t happen without the concurrence of the BIS Board.

In recent years, it has become increasingly obvious who really has power over our economy.

When Barack Obama speaks, the markets usually move very little.

When Ben Bernanke speaks, the markets often respond with wild gyrations.

A recent CNBC article entitled “Central Banks: How They Are Ruling the Financial World”
detailed the enormous impact that central banks had on the global financial system during

In all, 13 other central banks in the world have followed the Fed’s lead and set interest rates at or
near zero in an effort to keep the liquidity spigots open and prop up their ailing economies.
Those 14 economies represent a staggering $65 trillion in combined equity and bond market
capitalizations, according to Bank of America Merrill Lynch.

Later on in that same article, the author discussed the enormous amounts of money that global
central banks were creating out of thin air…

“When you add up all the central banks in the world, it’s going to be over $9 trillion,” said Marc
Doss, regional chief investment officer for Wells Fargo Private Bank. “That’s like creating the
second-largest economy in the world out of thin air.”

Indeed, central banking has become an economy unto itself, a multi-trillion-dollar empire that
massages and manipulates markets, which respond to the slightest news out of the respective
entities’ policy making committees.
So who controls the money?

The central banks of the world do.

And who controls those central banks?

The Bank for International Settlements does.

If we don’t like what the Bank for International Settlements is doing, can we do anything about it?

Nope. The Bank for International Settlements is above the law…

Maybe we’d feel better about the BIS if it were more transparent, but most everything about it,
including its bi-monthly member and board meetings, is shrouded in secrecy. And perhaps more
worrisome is that the BIS is free from oversight. By rights granted under its agreement with the
Swiss Federal Council, all of the bank’s archives, documents and “any data media” are
“inviolable at all times and in all places.” Furthermore, officers and employees of BIS “enjoy
immunity from criminal and administrative jurisdiction, save to the extent that such immunity is
formally waived . . . even after such persons have ceased to be Officials of the Bank.” Finally, no
claims against BIS or its deposits may be enforced “without the prior agreement of the Bank.”

In other words they can do whatever they want, without consequences. How’s that for a leak-
proof legal umbrella?

If the BIS wants to “intervene” in the financial markets, they simply just do it.

If the BIS wants to bail out big banks or even entire nations, they simply just do it.

The BIS reminds me of this old joke…

Q: Where does an 800 pound gorilla sit?

A: Anywhere it wants to.

So what is next for the Bank for International Settlements?

Well, many have speculated that eventually the goal is to have just a single global currency
which will be administered by a single global central bank. The BIS is already using Special
Drawing Rights (SDRs), which are considered to be a precursor to the coming global currency.
The BIS played a big role in the adoption of the euro, and more currency integration is almost
certainly on the way in future years…

But in the end, how you feel about the BIS may come down to how you feel about a one-world
currency. The bank was a major player promoting the adoption of the euro as Europe’s common
currency. There are rumors that its next project is persuading the U.S., Canada and Mexico to
switch to a similar regional money, perhaps to be called the “amero,” and it’s logical to assume
the bank’s ultimate goal is a single world currency. That would simplify transactions and really
solidify the bank’s control of the planetary economy.

But if the United States ever did give up the U.S. dollar, it would be a massive blow to our
national sovereignty.

When someone else controls your money, it doesn’t really matter that much who makes the laws.

Unfortunately, the global elite seem absolutely obsessed with the idea of a global currency, a one
world economic system and a global government.

None of those things will happen this year, but that is where we are moving. With each new
crisis that arises, the solutions that we will be given will always involve more centralization and
more globalization.

So what do you think about all of this?

Please feel free to share your thoughts by leaving a comment below…

Similar/Related Articles

   1. Unelected, Unaccountable, Unrepentant
   2. Federal Reserve boosts flow of dollars to European Central Bank
   3. World’s Most Prestigious Financial Agency – Called the “Central Banks’ Central Bank” – Slams
       U.S. Economic Policy
   4. European Central Bank President Calls for Corrupt BIS to Boss Global Government in CFR Speech
   5. Financial Terrorists Want Global Currency, Global Central Bank
   6. Federal Reserve May Be `Central Bank of the World’ After UBS, Barclays Aid
   7. China central bank says Fed easing ineffective and dangerous
   8. German Central Bank Admits that Credit is Created Out of Thin Air
   9. Vatican Calls for “Central World Bank”
   10. The IMF Catapults From Shunned Agency to Global Central Bank
   11. Swiss Central Bank Weighs Pegging Franc to the Euro
   12. Is A Central Bank Gold Run At Hand?


Bank for International Settlements
From Wikipedia, the free encyclopedia

Jump to: navigation, search

             This article needs additional citations for verification. Please help improve this article by
             adding citations to reliable sources. Unsourced material may be challenged and removed.
             (August 2012)

         Bank for International Settlements

  Type                        International organization

  Purpose/focus               Central bank cooperation

  Location                    Basel, Switzerland

  Membership                  58 central banks

  General manager             Jaime Caruana

  Main organ                  Board of directors[1]

  Website                     www.bis.org

The Bank for International Settlements (BIS) is an international organization of central banks
which "fosters international monetary and financial cooperation and serves as a bank for central
banks".[2] As an international institution, it is not accountable to any single national government.

The BIS carries out its work through subcommittees, the secretariats it hosts and through an
annual general meeting of all member banks. It also provides banking services, but only to
central banks and other international organizations. It is based in Basel, Switzerland, with
representative offices in Hong Kong and Mexico City.

        1 History
        2 Organization of central banks
             o 2.1 Regulates capital adequacy
             o 2.2 Encourages reserve transparency
        3 Tier 1 versus total capital
        4 Goal: a financial safety net
        5 Role in banking supervision
        6 Accounting and use of SDRs
        7 Members
        8 General managers
        9 Board of directors
        10 See also
        11 References
        12 External links

[edit] History

BIS members.

The BIS was established by an intergovernmental agreement in 1930, the founding states being
Germany, Belgium, France, Great Britain and Northern Ireland, Italy, Japan, and Switzerland.[3]

The Bank was originally intended to facilitate reparations imposed on Germany by the Treaty of
Versailles after World War I.[4] The need to establish a dedicated institution for this purpose was
suggested in 1929 by the Young Committee, and was agreed to in August of that year at a
conference at The Hague. A charter for the bank was drafted at the International Bankers
Conference at Baden Baden in November, and its charter was adopted at a second Hague
Conference on January 20, 1930. According to the charter, shares in the bank could be held by
individuals and non-governmental entities. The BIS was constituted as having corporate
existence in Switzerland on the basis of an agreement with Switzerland acting as headquarter
state for the bank. It also enjoyed immunity in all the contracting states.

Between 1933 and 1945, the board of directors of the BIS included Walter Funk, a prominent
Nazi official; and Emil Puhl, who were both convicted at the Nuremberg trials after World War
II, as well as Hermann Schmitz, the director of IG Farben; and Baron von Schroeder, the owner
of the J.H.Stein Bank, the bank that held the deposits of the Gestapo. There were allegations that
the BIS had helped the Germans loot assets from occupied countries during World War II.

As a result of these allegations, at the Bretton Woods Conference held in July 1944, Norway
proposed the "liquidation of the Bank for International Settlements at the earliest possible
moment". This resulted in the BIS being the subject of a disagreement between the American
and British delegations. The liquidation of the bank was supported by other European delegates,
as well as the United States (including Harry Dexter White, Secretary of the Treasury, and Henry
Morgenthau),[5] but opposed by John Maynard Keynes, head of the British delegation.

Fearing that the BIS would be dissolved by President Franklin Delano Roosevelt, Keynes went
to Morgenthau hoping to prevent the dissolution, or have it postponed, but the next day the
dissolution of the BIS was approved. However, the liquidation of the bank was never actually
undertaken.[6] In April 1945, the new U.S. president Harry S. Truman and the British government
suspended the dissolution, and the decision to liquidate the BIS was officially reversed in 1948.[7]

The BIS was originally owned by both governments and private individuals, since the United
States and France had decided to sell some of their shares to private investors. BIS shares traded
on stock markets, which made the bank an unusual organization: an international organization (in
the technical sense of public international law), yet allowed for private shareholders. Many
central banks had similarly started as such private institutions; for example, the Bank of England
was privately owned until 1946. In more recent years the BIS has forcibly bought back its once
publicly traded shares.[8] It is now wholly owned by BIS members (central banks) but still
operates in the private market as a counterparty, asset manager and lender for central banks and
international financial institutions. [9] Profits from its transactions are used, among other things,
to fund the bank's other international activities.
[edit] Organization of central banks

The BIS Headquarters in Basel, Switzerland.

BIS building by Mario Botta, in Basel.

                 Part of a series on Government

                      Public finance

Fiscal policy[show]

Monetary policy[show]

Trade policy[show]

Revenue and Spending[show]



                                v
                                t
                                e
As an organization of central banks, the BIS seeks to make monetary policy more predictable
and transparent among its 58 member central banks. While monetary policy is determined by
each sovereign nation, it is subject to central and private banking scrutiny and potentially to
speculation that affects foreign exchange rates and especially the fate of export economies.
Failures to keep monetary policy in line with reality and make monetary reforms in time,
preferably as a simultaneous policy among all 58 member banks and also involving the
International Monetary Fund, have historically led to losses in the billions as banks try to
maintain a policy using open market methods that have proven to be based on unrealistic

Central banks do not unilaterally "set" rates, rather they set goals and intervene using their
massive financial resources and regulatory powers to achieve monetary targets they set. One
reason to coordinate policy closely is to ensure that this does not become too expensive and that
opportunities for private arbitrage exploiting shifts in policy or difference in policy, are rare and
quickly removed.

Two aspects of monetary policy have proven to be particularly sensitive, and the BIS therefore
has two specific goals: to regulate capital adequacy and make reserve requirements transparent.

[edit] Regulates capital adequacy

Capital adequacy policy applies to equity and capital assets. These can be overvalued in many
circumstances because they do not always reflect current market conditions or adequately assess
the risk of every trading position. Accordingly the BIS requires the capital/asset ratio of central
banks to be above a prescribed minimum international standard, for the protection of all central
banks involved.

The BIS's main role is in setting capital adequacy requirements. From an international point of
view, ensuring capital adequacy is the most important problem between central banks, as
speculative lending based on inadequate underlying capital and widely varying liability rules
causes economic crises as "bad money drives out good" (Gresham's Law).

[edit] Encourages reserve transparency

Reserve policy is also important, especially to consumers and the domestic economy. To ensure
liquidity and limit liability to the larger economy, banks cannot create money in specific
industries or regions without limit. To make bank depositing and borrowing safer for customers
and reduce risk of bank runs, banks are required to set aside or "reserve".

Reserve policy is harder to standardize as it depends on local conditions and is often fine-tuned
to make industry-specific or region-specific changes, especially within large developing nations.
For instance, the People's Bank of China requires urban banks to hold 7% reserves while letting
rural banks continue to hold only 6%, and simultaneously telling all banks that reserve
requirements on certain overheated industries would rise sharply or penalties would be laid if
investments in them did not stop completely. The PBoC is thus unusual in acting as a national
bank, focused on the country not on the currency, but its desire to control asset inflation is
increasingly shared among BIS members who fear "bubbles", and among exporting countries
that find it difficult to manage the diverse requirements of the domestic economy, especially
rural agriculture, and an export economy, especially in manufactured goods.

Effectively, the PBoC sets different reserve levels for domestic and export styles of development.
Historically, the United States also did this, by dividing federal monetary management into nine
regions, in which the less-developed western United States had looser policies.

For various reasons it has become quite difficult to accurately assess reserves on more than
simple loan instruments, and this plus the regional differences has tended to discourage
standardizing any reserve rules at the global BIS scale. Historically, the BIS did set some
standards which favoured lending money to private landowners (at about 5 to 1) and for-profit
corporations (at about 2 to 1) over loans to individuals. These distinctions reflecting classical
economics were superseded by policies relying on undifferentiated market values—more in line
with neoclassical economics.

[edit] Tier 1 versus total capital

The BIS sets "requirements on two categories of capital, tier 1 capital and total capital. Tier 1
capital is the book value of its stock plus retained earnings. Tier 2 capital is loan-loss reserves
plus subordinated debt. Total capital is the sum of Tier 1 and Tier 2 capital. Tier 1 capital must
be at least 4% of total risk-weighted assets. Total capital must be at least 8% of total risk-
weighted assets. When a bank creates a deposit to fund a loan, its assets and liabilities increase
equally, with no increase in equity. That causes its capital ratio to drop. Thus the capital
requirement limits the total amount of credit that a bank may issue. It is important to note that the
capital requirement applies to assets while the bank reserve requirement applies to liabilities."[10]

[edit] Goal: a financial safety net

The relatively narrow role the BIS plays today does not reflect its ambitions or historical role.

A "well-designed financial safety net, supported by strong prudential regulation and supervision,
effective laws that are enforced, and sound accounting and disclosure regimes", are among the
Bank's goals. In fact they have been in its mandate since its founding in 1930 as a means to
enforce the Treaty of Versailles.

The BIS has historically had less power to enforce this "safety net" than it deems necessary.
Recent head Andrew Crockett has bemoaned its inability to "hardwire the credit culture", despite
many specific attempts to address specific concerns such as the growth of offshore financial
centres (OFCs), highly leveraged institutions (HLIs), large and complex financial institutions
(LCFIs), deposit insurance, and especially the spread of money laundering and accounting
[edit] Role in banking supervision

The BIS provides the Basel Committee on Banking Supervision with its 17-member secretariat,
and with it has played a central role in establishing the Basel Capital Accords of 1988 and 2004.
There remain significant differences between United States, EU, and UN officials regarding the
degree of capital adequacy and reserve controls that global banking now requires. Put extremely
simply, the United States, as of 2006, favoured strong strict central controls in the spirit of the
original 1988 accords, while the EU was more inclined to a distributed system managed
collectively with a committee able to approve some exceptions.

The UN agencies, especially ICLEI, are firmly committed to fundamental risk measures: the so-
called triple bottom line and were becoming critical of central banking as an institutional
structure for ignoring fundamental risks in favour of technical risk management.

[edit] Accounting and use of SDRs

Since 2004, the BIS has published its accounts in terms of special drawing rights (SDRs),
replacing the gold franc as the bank's unit of account. As of March 2007 (end of month) the bank
had total assets of $409.15 billion, given a dollar/SDR exchange rate of 1.51 for March 30, 2007.
Included in that total is 150 tons of fine gold.

[edit] Members

60 member central banks or monetary authorities of these countries:

   Algeria                          Hungary                          Poland
   Argentina                        Iceland                          Portugal
   Australia                        India                            Romania
   Austria                          Indonesia                        Russia
   Belgium                          Ireland                          Saudi Arabia
   Bosnia and Herzegovina           Israel                           Serbia
   Brazil                           Italy                            Singapore
   Bulgaria                         Japan                            Slovakia
   Canada                           South Korea                      Slovenia
   Chile                            Latvia                           South Africa
   China                            Lithuania                        Spain
   Colombia                         Luxembourg                       Sweden
   Croatia                          Macedonia                        Switzerland
   Czech Republic                   Malaysia
   Denmark                          Mexico
   Estonia                          Netherlands
                                                                     United Arab Emirates
   Finland                          New Zealand
                                                                     United Kingdom
   France                           Norway                           United States
   Germany                          Peru                             European Central Bank
   Greece                           Philippines
   Hong Kong

[edit] General managers
        Name              Nationality                  Dates

Jaime Caruana             Spain            April 2009 – present

Malcolm D. Knight         Canada           April 2003 – September 2008

Sir Andrew Crockett       United Kingdom January 1994 – March 2003

Alexandre Lamfalussy      Belgium          May 1985 – December 1993

Gunther Schleiminger      Germany          1981 – May 1985

René Larre                France           1971–1981

Gabriel Ferras            France           1963–1971

Guillaume Guindey         France           1958–1963

Roger Auboin              France           1938–1958

Pierre Quesnay            France           1930–1938

[edit] Board of directors

       Christian Noyer, Paris (Chairman of the Board of Directors)
       Masaaki Shirakawa, Tokyo
       Ben Bernanke, Washington, D.C.
       Mark Carney, Ottawa
       Agustín Carstens, Mexico City
       Luc Coene, Brussels
       Andreas Dombret, Frankfurt am Main
       Mario Draghi, Frankfurt am Main
       William Dudley, New York
       Stefan Ingves, Stockholm
       Thomas Jordan[disambiguation needed], Zurich
       Mervyn King, London
       Klaas Knot, Amsterdam
       Anne Le Lorier, Paris
       Guy Quaden, Brussels
       Fabrizio Saccomanni, Rome
       Ignazio Visco, Rome
        Jens Weidmann, Frankfurt am Main
        Zhou Xiaochuan, Beijing

[edit] See also

        Bank regulation
        Basel III
        Continuous linked settlement
        Global financial system
        International Court of Justice
        League of Nations

[edit] References

    1.  ^ "Board of Directors". www.bis.org/. Archived from the original on 22 April 2011.
        http://www.bis.org/about/board.htm. Retrieved 2011-04-14.
    2. ^ "About BIS". Web page of Bank for International Settlements. Archived from the original on 14 May
        2008. http://www.bis.org/about/index.htm. Retrieved May 17, 2008.
    3. ^ http://treaties.un.org/Pages/showDetails.aspx?objid=0800000280167c31
    4. ^ BIS History - Overview. BIS website. Retrieved 2011-02-13.
    5. ^ United Nations Monetary and Financial Conference, Final Act (London et al., 1944), Article IV.
    6. ^ R. F. Mikesell, The Bretton Woods Debates: A Memoir, Essays in International Finance 192 (Princeton:
        International Finance Section, Dept. of Economics, Princeton University, 1994), p. 42 . ISBN 0-88165-099-4.
    7. ^ brief history of the BIS
    8. ^ http://www.bis.org/press/p050601.htm
    9. ^ http://www.bis.org/banking/finserv.htm
    10. ^ Liu, Henry C. K. China: PART 4: China steady on the peg

[edit] External links

         Wikimedia Commons has media related to: Bank for International Settlements

        BIS website
        Global Banking: The Bank For International Settlements An analysis of the origins and functions
         of the BIS.
        The Money Club By Edward Jay Epstein, Harpers, 1983.
        Andrew Crockett statement to the IMF.
        An account of the use of reserve policy and other central bank powers in China By Henry C K Liu
         in the Asia Times.
        A video documentary about the BIS role in financing Nazi Germany by British Television
        Bank for International Settlements in the Dodis database of the Diplomatic Documents of

47°32′53″N 7°35′31″E47.54806°N 7.59194°E

                         v
                         t
                         e

    Central banks



                     Bank for
                     Basel
Global                Committee
                      on Banking
                     Financial


  By continent

                     Bank of Central
                      African States
                     Central Bank of
                      West African
   Bank of Algeria
   Central Bank of
   Bank of
   Bank of the
    Republic of
   Bank of Cape
   Central Bank of
    the Comoros
   Central Bank of
    the Congo
   Central Bank of
   Central Bank of
   Bank of Eritrea
   National Bank
    of Ethiopia
   Central Bank of
    The Gambia
   Bank of Ghana
   Central Bank of
    the Republic of
   Central Bank of
   Central Bank of
   Central Bank of
   Central Bank of
   Reserve Bank
    of Malawi
   Bank of
   Bank Al-
   Bank of
   Central Bank of
   Bank of
   South African
    Reserve Bank
   Bank of South
   Bank of Sudan
   Central Bank of
   Bank of
   Central Bank of
              Bank of
              Bank of Zambia
              Reserve Bank
               of Zimbabwe

              Central Bank of
              Central Bank of
              Central Bank of
               The Bahamas
              Central Bank of
              Central Bank of
              Bank of
              Central Bank of
              Bank of the
              Central Bank of
              Central Bank of
               Curaçao and
               Sint Maarten
              Eastern
           Central Bank
          Bank of the
           Republic of
          Central Bank of
          Bank of
          Bank of Mexico
          Central Bank of
          Central
           Reserve Bank
           of Peru
          Central Bank of
          Central Bank of
           Trinidad and
          Federal
           System (United
          Central Bank of

Asia      Da Afghanistan
   Central Bank of
   Bangladesh
   Royal
    Authority of
   Brunei
    Currency and
   National Bank
    of Cambodia
   People's Bank
    of China
   Hong Kong
   Reserve Bank
    of India
   Bank Indonesia
   Central Bank of
    the Islamic
    Republic of
   Central Bank of
   Bank of Israel
   Bank of Japan
   Central Bank of
   National Bank
    of Kazakhstan
   National Bank
    of the Kyrgyz
   Bank of Korea
   Central Bank of
    the Democratic
    Republic of
   Central Bank of
   Banque du
   Monetary
    Authority of
   Bank Negara
   Maldives
   Bank of
   Central Bank of
   Nepal Rastra
   Central Bank of
   State Bank of
   Palestine
   Bangko Sentral
    ng Pilipinas
   Qatar Central
   Monetary
    Authority of
   Central Bank of
    Sri Lanka
   Central Bank of
   Central Bank of
    the Republic of
    China (Taiwan)
   Bank of
   Central Bank of
    the United
    Arab Emirates
            Central Bank of
            State Bank of
            Central Bank of

            European
             Central Bank
            National Bank
             of the Republic
             of Abkhazia
            Bank of
            Central Bank of

Europe      Central Bank of
            National Bank
             of the Republic
             of Belarus
            Central Bank of
             Bosnia and
            Bulgarian
             National Bank
            Croatian
             National Bank
   Czech National
   Danmarks
   Bank of
   Bank of Estonia
   National Bank
    of Georgia
   Hungarian
    National Bank
   Central Bank of
   Central Bank of
   National Bank
    of Latvia
   Bank of
   National Bank
    of the Republic
    of Macedonia
   National Bank
    of Moldova
   Central Bank of
   Norges Bank
   Central Bank of
    the Turkish
              Republic of
             National Bank
              of Poland
             National Bank
              of Romania
             Central Bank of
             National Bank
              of Serbia
             Sveriges
             Swiss National
             Central Bank of
              the Republic of
             National Bank
              of Ukraine

             Reserve Bank
              of Australia
             Reserve Bank

Oceania       of Fiji
             Reserve Bank
              of New
             Bank of Papua
                           New Guinea
                          Central Bank of
                          Central Bank of
                          National
                           Reserve Bank
                           of Tonga


   Policies and implementation

                           Capital
                           Contractionary
                            monetary policy
                           Expansionary
                            monetary policy

                           Capital control
                           Discount rate
                           Interest rates
                           Money creation
                           Open market
                           Sovereign wealth

                                Bretton Woods system





Retrieved from

View page ratings

Rate this page

What's this?





    I am highly knowledgeable about this topic (optional)

    I have a relevant college/university degree
    It is part of my profession

    It is a deep personal passion

    The source of my knowledge is not listed here

    I would like to help improve Wikipedia, send me an e-mail (optional)

We will send you a confirmation e-mail. We will not share your e-mail address with outside parties as
per our feedback privacy statement.

Submit ratings

Saved successfully

Your ratings have not been submitted yet

Your ratings have expired

Please reevaluate this page and submit new ratings.

An error has occurred. Please try again later.

Thanks! Your ratings have been saved.

Do you want to create an account?

An account will help you track your edits, get involved in discussions, and be a part of the community.

Create an accountorLog inMaybe later

Thanks! Your ratings have been saved.

Did you know that you can edit this page?

Edit this pageMaybe later


       Banks established in 1930
       1930 establishments in Switzerland
       Central banks
       International banking institutions
       International finance institutions
       Supranational banks

BIS Review 56/2010 1
Jean-Claude Trichet: Global governance today
Keynote address by Mr Jean-Claude Trichet, President of the European Central Bank, at the
Council on Foreign Relations, New York, 26 April 2010.
Ladies and Gentlemen,
It is a real pleasure to be back here at the Council on Foreign Relations.
You will all be familiar with the well-worn French expression “plus ça change, plus c’est la
même chose” – and its New York equivalent “same old, same old” – to imply a world-weary
feeling that despite the appearance of change, things remain the same.
Well, since my last visit three years ago, I think we will all agree that there have been the
most dramatic changes in the world economy. And these are changes that suggest that
things will not and should not remain the same.
Back in April 2007, I noted that the ever-closer integration of national economies and the rise
in capital mobility had made the international system more vulnerable to changes in investor
sentiment. I added that it was vital to strengthen the ability of the global economic system to
absorb shocks to preserve global financial stability.
But few then could have imagined the magnitude of what eventually came to pass, starting
with the subprime crisis in the summer of 2007, turning into a full-blown global financial crisis
in the autumn of the following year with the collapse of Lehman Brothers, and culminating in
a devastating impact on trade, production and jobs.
These are not entirely new phenomena – but we have to go a long way back in the history
books for a suitable comparison. According to economic historians Barry Eichengreen and
Kevin O’Rourke, the initial decline in global production between mid-2008 and mid-2009 was
broadly comparable with that at the beginning of the Great Depression. The corresponding
correction in global equity prices and the fall in global trade volumes were even larger.
The good news is that the global economy has now turned the corner, largely thanks to the
unprecedented support measures taken by both central banks and governments, which have
helped to restore confidence. Yet the recovery remains somewhat fragile and not yet
sufficiently supported by private demand; therefore, it is not the time for complacency.
I should add that the recovery should be measured in much broader terms than focusing on
a resumption of GDP growth. A full recovery also implies a return to sustainable fiscal
positions. It means a full restoration of trust in some of our financial institutions. And it
requires a healing of the scars that the irresponsible behaviour of some financial players has
inflicted on our societies and on the real economy.
In my introductory remarks today, I would like to explore some of the lessons for
policy-makers around the world that can be drawn from the extraordinary events of the past
three years.
I will first elaborate on why we need a set of rules, institutions, informal groupings and
cooperation mechanisms that we call “global governance”.
Second, I will analyse how, in hindsight, the existing system of global governance has fared
during the crisis.
Third, I will examine the evolution of the system in response to the crisis, in particular the rise
of new key players in the world economy, such as the G20, the Global Economy Meeting of
central bank governors and the Financial Stability Board.
2 BIS Review 56/2010
1. Why we need global governance
There are numerous definitions of global governance. In the economic and financial sphere I
will propose that global governance comprehends not only the constellation of supranational
institutions – including the international financial institutions – but also the informal groupings
that have progressively emerged at the global level. Those informal forums (G7, G10, G20,
etc.) are key in improving global coordination in all the areas where decision making
processes remain national – whether in helping to work out agreed prudential standards and
codes or to facilitate where appropriate, the coordination of economic macro-policies.
No market can survive without a set of rules. This is particularly true at the international level,
where natural barriers to transactions are formidable. One of the global governance’s primary
aims should be that of facilitating the proper functioning of cross-border markets and thereby
of reducing transaction costs.
The process of doing so is evolutionary and demands a pragmatic approach with respect to
what arrangements may and may not work, depending on the circumstances. But the more
complex the goods and services exchanged are, the greater the need for a sound
institutional infrastructure. In this respect, finance stands out as an arena in which global
rules may be particularly beneficial.
More generally, the crisis has weakened the arguments of those who think that deregulation
is always conducive to better functioning markets. We have learned once again that markets
cannot function properly without an effective regulatory and supervisory infrastructure.
Governments, central banks, international institutions and globally agreed prudential
standards and codes are the means by which we collectively seek to avail ourselves of the
global public good of global economic stability.
Of course, there are limits to what internationally agreed rules can and should seek to
First, the principle of subsidiarity is essential. This principle, which is a key feature underlying
of European Union legislative framework, says that no rule should be imposed at a global or
supra-national level that cannot be more or equally effectively set at the national or local
level. This principle might also be read as implying that the “burden of proof” should rest on
those who want to establish global, as opposed to local, rules and institutions.
Second, it is not straightforward to set common rules in complex and innovative fields such
as finance. While financial liberalisation, deregulation and innovation all have the potential to
make our economies more productive and more resilient, the financial sector must not forget
that its purpose is to serve the real economy, not the other way around. We have painfully
witnessed the fallout from excessive complexity of financial instruments in the current crisis.
Finally, there is a risk that common rules are not optimal and in particular that they are too
limited, since they have to be the minimum standards across many constituencies. This risk
is very real in the area of finance because of significant differences across countries in
financial structures, financial instruments and preferences for financial regulation.
Overall, the global financial crisis has shattered previously held convictions that “keeping
one’s house in order” is the right principle to ensure global welfare. We have certainly
become more aware of the negative externalities that financial innovation and financial
globalisation can create. Finance in its current form has become a double-edged sword for
the real economy.
2. How global governance has fared during the global crisis
Let me now turn to how our institutions of global governance in the financial sphere have
fared during the crisis.
BIS Review 56/2010 3
Central bank cooperation
One dimension of international cooperation that I consider to have worked particularly well
during the financial crisis has been that among central banks – both bilaterally and
channelled through the various Basel-based committees. This institutionalised cooperation
has ensured an unprecedented degree of collaboration in, for instance, the provision of
cross-border liquidity – the network of temporary currency swaps or repos set up bilaterally
by major central banks such as the Fed and the European Central Bank.
The Bank of International Settlement (BIS) itself has been “ahead of the curve” in terms of
identifying unsustainable trends in the financial sector and more generally in the global
economy – such as the under-appreciation of risk and excessive credit growth – which
eventually led to the crisis. It could do so based on a high degree of analytical depth and
information sharing at a global level that the central banks’ global cooperation has been able
to develop over time.
These analytical contributions assisted in driving the strong and coordinated policy response
when the crisis erupted. We have now scaled back our cross-border operations as markets
have recovered, but the spirit of cooperation and the readiness to work together is stronger
than ever.
Regulatory arbitrage
But as much as some aspects of global governance appear to have passed the severe test
of the global crisis, we should remember the significant shortcomings that may have
contributed to creating the conditions for the crisis to happen in the first place.
One is the lack of coordination in financial regulation that was pervasive before the crisis and
which encouraged financial institutions to engage in a large degree of regulatory arbitrage.
This was the unavoidable result of the fact that while financial players were becoming
increasingly global, and despite the remarkable efforts of the Basel Committee in respect of
the banking sector, financial regulation remained largely national, with only relatively weak
coordination at the international level.
The dramatic under-supply of the global public good of international financial stability is an
area where reform is essential.
Global imbalances
Another shortcoming that needs to be addressed for the future was the insufficient
orientation of macroeconomic policies towards medium-term stability and sustainability. This
led to the build-up of unsustainable external imbalances between deficit and surplus
economies prior to the crisis.
Although warnings had been voiced, including by the IMF, about the risks of a disorderly
adjustment, there was no effective mechanism to influence macroeconomic and structural
policies in key countries where those policies appeared unsustainable from the standpoint of
global economic and financial stability. This must change – and it requires both the work of
international institutions and the cooperation of national authorities.
3. The evolution of global governance
Let me turn to the question of how global governance is evolving after the crisis.
The scope of international cooperation has been significantly broadened. After an initially
hesitant response, governments implemented broadly coordinated policies, both within the
EU as well as at the global level under the aegis of the G20. And central banks were able to
take quick, decisive and coordinated action at short notice.
4 BIS Review 56/2010
But the crisis also showed that gaps in the system of global governance – in terms of both
efficiency and legitimacy – have to be filled. This can be done – indeed, it is being done – by
strengthening the mandate of existing international institutions and adjusting existing or
developing new informal forums.
Overall, the system is moving decisively towards genuine global governance that is much
more inclusive, encompassing key emerging economies as well as industrialised countries.
The significant transformation of global governance that we are engineering today is
illustrated by three examples.
First, the emergence of the G20 as the prime group for global economic governance at the
level of ministers, governors and heads of state or government. Second, the establishment of
the Global Economy Meeting of central bank governors under the auspices of the BIS as the
prime group for the governance of central bank cooperation. And third, the extension of
Financial Stability Board membership to include all the systemic emerging market
Let me touch on each of these.
The breakthrough of the G20
One distinctive feature of this crisis has been that it erupted at the centre of the system.
Although emerging countries have been severely affected, taken as a group, they have
rapidly become a source of strength for the world economy. It is therefore not surprising that
the crisis has led to a clear recognition of their increased economic importance and to their
full integration into the institutions of global governance, notably with the breakthrough of the
The G20 has been effective in addressing the global crisis. We are now at the stage where
this forum is making the transition from acting in a crisis resolution mode to contributing to
crisis prevention. This is, in particular, the purposes of the G20 framework for strong,
sustainable and balanced growth. The primary goal of this framework is to collectively
implement coherent and medium-term policy framework to attain a mutually beneficial growth
For this purpose a Mutual Assessment Process (MAP) has been set up that will allow to
assess whether policies of individual members are collectively consistent with sustainable
and balanced growth trajectories. The first steps in this MAP have been presented by the
IMF to the G20 Ministers and Governors last week during our spring Washington meetings.
Guidance has been given to the IMF on the next steps in the process that will lead to policy
recommendations on how to best meet the common goal of strong, sustainable and
balanced growth.
Since this process is fully owned by the G20 members, and given that it involves them not
only at the level of Ministers and Governors but also at the level of Heads of State and
Government, it is confirming the strong commitment at the global level to more multilaterism
in economic decision making.
Further strengthening of central bank cooperation
In the area of central bank cooperation, the main forum is the Global Economy Meeting
(GEM), which gathers at the BIS headquarter in Basel. Over the past few years, this forum
has included 31 governors as permanent members plus a number of other governors
attending on a rotating basis. The GEM, in which all systemic emerging economies’ Central
Bank governors are fully participating, has become the prime group for global governance
among central banks.
The GEM has become a very important forum for assessing global economic and financial
conditions, for analysing economic and financial policy issues of common interest to central
BIS Review 56/2010 5
banks. I have the privilege of chairing the GEM presently, and must say that I find the candid
exchange of views of our bi-monthly meetings of enormous value.
Strengthening institutions
Among the new and strengthened forums, I would like to highlight the expansion of the
membership in the Financial Stability Board (FSB), whose membership is now largely
overlapping that of the G20. The FSB has received an enhanced mandate to strengthen the
international financial architecture and global financial stability.
Collaborative efforts between the IMF and the FSB in this context are currently underway,
including a joint early warning exercise for the identification of risks to the global economy.
The IMF itself has overhauled its lending framework and introduced new instruments to
assist countries in financial need, a first step in the broader discussion of its future mandate
and internal governance. The meeting of the IMFC, two days ago in Washington, showed a
confirmed determination to move ahead in this field.
The crisis has also pointed to the need to enhance the framework for cooperation in financial
regulation and supervision in Europe. As a result, micro-prudential supervision will be
reinforced with the creation of a European System of Financial Supervisors, including three
new European supervisory authorities in banking, insurance and securities.
Moreover, micro-prudential supervision will be complemented by macro-prudential
supervision, focusing on the prevention of systemic risk. The financial crisis has been
revealing in many respects. It has revealed the scale of the potential fallout from the failure of
large financial institutions. It has revealed the fragility of the financial system to features and
trends that cut across institutions, markets and infrastructures. And it has illustrated the
magnitude of the consequences of adverse feedback loop between the financial system and
the real economy.
All three elements I have just described are key features of systemic risk: first, contagion;
second, the build-up of financial imbalances and unsustainable trends within and across the
various components of the financial system; and third, the close links with the real economy
and the potential for strong feedback effects.
In short, the crisis has revealed the fundamental importance of systemic risk. The purpose of
macro-prudential supervision is to identify sources of systemic risk and recommend remedial
action. In the EU, this will be the task of the European Systemic Risk Board (ESRB). The
members of the ECB’s General Council will be voting members of the ESRB, together with
the three heads of the envisaged European supervisory authorities and a member of the
Commission. Moreover, the body will comprise all national supervisory authorities. The ECB,
as an institution of the European Union as a whole, as an institution of the 27 EU Member
States, has been invited to provide support to the ESRB. The Ecofin Council concluded that
the ECB should provide analytical, statistical, administrative and logistical support, in close
cooperation with all the national central banks from the 27 states. The ECB is prepared to
bring to the benefit of the ESRB, with the participation of all the members of the ECB’s
General Council, the macroeconomic, financial and monetary expertise of all EU central
The legislative proposals are currently being reviewed by the European Parliament for a
decision later this year. I am confident that the ESRB can make a very important contribution
for the overall stability and functioning of the EU’s financial system.
In conclusion I would like to stress four points.
6 BIS Review 56/2010
First, global governance is of the essence to improve decisively the resilience of the global
financial system. We avoided a major depression but it was a close call. Governments had to
support the financial sector by putting at risk taxpayers’ money for the equivalent of around
25 % of GDP on both sides of the Atlantic. This as unprecedented. I am convinced that, if we
do not reinforce significantly the resilience of the financial system, our democracies will not
accept for a second time such a very large scale of rescue operation.
Second, a characteristic of the recent turbulences is not only that they displayed a high level
of unpredictability but also an extreme rapidity in the succession of events characterising the
unfolding of the crisis. Global governance today must demonstrate a capacity to coordinate
with agility and, where necessary, to decide extremely swiftly. This is also unprecedented.
Third, the crisis has had some paradoxical effects: on the one hand it has unleashed a
tendency to reengage in financial nationalism if not mercantilism; on the other hand it had
contributed to the recognition that a very high degree of interdependencies between
economies called for a much higher level of cooperation. These two opposing forces are
presently competing. It is imperative that effective global governance preserve the level
playing field which is indispensable to foster global stability and prosperity. It is a major
challenge. Both sides of the Atlantic have a very important responsibility in this respect in
many domains, in particular in prudential and accounting rules.
And fourth, as we have seen the crisis has driven an historic change in the framework of
global governance. In my view this transformation was overdue. But there are two immediate
reasons for this change. One is positive: the emerging economies are now economically and
financially so important and systemically so influential that they must have a full and proper
ownership of global governance. But the second reason is negative: the industrialised
countries have proven particularly clumsy in their handling of global finance before the crisis
at the time when their responsibility in global governance was obviously overwhelming.
There was therefore no reason to confirm their exclusive prime responsibility. This calls for
the industrialised countries to be now particularly irreproachable in the delivery of their
present and future contribution to the stability and prosperity of the global economy within the
new, more inclusive framework.
Thank you for your attention.


Central Banks: How They Are Ruling the Financial World
By:Jeff Cox | CNBC.com Staff Writer

CNBC.com | Thursday, 13 Dec 2012 | 1:33 PM ET

It's a central bankers' world, and we're all just living in it.

Entities such as the Federal Reserve and the European Central Bank in 2012 took control of global economies
like never before. Based on current market and economic behavior it's likely to be years before anything

After all, how can central banks take their foot off the stimulus pedal when there's so much at stake?

In all, 13 other central banks in the world have followed the Fed's lead and set interest rates at or near zero in
an effort to keep the liquidity spigots open and prop up their ailing economies. Those 14 economies represent a
staggering $65 trillion in combined equity and bond market capitalizations, according to Bank of America
Merrill Lynch.

As for the bond-buying programs - aka quantitative easing - that dovetail with the low interest rates, the U.S.
central bank alone shortly will eclipse $3 trillion on its balance sheet and is expected to end 2013 north of $4
trillion in electronically created money. (Read More: Fed to Keep Easing, Sets Target for Rates)

Globally, that figure is, well, a lot.

"When you add up all the central banks in the world, it's going to be over $9 trillion," said Marc Doss, regional
chief investment officer for Wells Fargo Private Bank. "That's like creating the second-largest economy in the
world out of thin air."

Indeed, central banking has become an economy unto itself, a multi-trillion-dollar empire that massages and
manipulates markets, which respond to the slightest news out of the respective entities' policy making
And if you're looking for the off-ramp, a point at which the central banks let the free market to its own devices,
don't hold your breath.

Fed Chairman Ben Bernanke and the central bank's Open Markets Committee said Wednesday that rates will
remain near zero at least until unemployment drops to 6.5 percent and inflation rises to 2.5 percent. (Read
More: Job Creation Hits 146,000, Rate at 7.7%)

If current trends are any gauge, either occurrence is likely to take years.

In the meantime, equity markets remain tethered to Fed policy, dropping in part on Wednesday's news over
fears that the Fed isn't doing enough.

In fact, otherwise bullish Bank of America strategists say the main risk to stocks next year is the economy
improving significantly, as that might spur the Fed to dial down the extraordinary measures it is taking to keep
the American growth engine purring.

"The most obvious reason for the ongoing rally in risk assets is the largess of major central banks. Policy
continues to be a major driver of risk appetite," Michael Hartnett, BofA's chief investment strategist, said in a
report. "With so much investment flow predicated on QE-infinity, and the maintenance of zero interest rates,
anything that disturbs the liquidity outlook is likely to increase volatility."

"We worry that the strong performance of banks, value, (real estate investment trusts) and bonds and the
underperformance of cash make bond and equity markets vulnerable to any upside growth surprises in (the
first half of 2013), as this would likely lower liquidity expectations," he added. (Read More: Why BofA Thinks
Stocks Will Hit New High in 2013)

The result of such widely shared sentiment is an upside-down world for investors.

Whereas those looking to put money to work in the equity markets could simply look at a company's
fundamentals and price action then act accordingly, a world where aggressive central bank policy will be at
play indefinitely and immeasurably changes the entire landscape.

Yes, monetary policy always has been important to the markets, but not like this.

"We have never seen investors so nervous after such a strong market. We would have expected greater
enthusiasm," Deutsche Bank's strategists said in an analysis. "If the Fed were to leave (policy) alone and let
markets decide, then equity markets would probably fall. But, as it is, if real investors can't predict which way
markets will go, then they will stay on the sidelines."

Gripe though they may, however, investors are not apt to swim against the tide.

None of the major Wall Street houses is betting against the stock market in 2013, reasoning that equities will
be pushed forward by a modestly strengthening economy and continued Fed accommodation. (Read More:
Why Has Wall Street Gotten So Bullish About Next Year?)

Hedge fund manager Blackrock is virtually alone in its assessment that Fed tightening actually could send
money into equities - in a "dash for trash," the firm said - while most others believe central bank liquidity is

JPMorgan Chase, for one, correctly anticipated that the Fed would tie its policy to specific economic targets -
in part as an effort to counteract the political and fiscal mess in Washington.
"This change in communications should further cement the view that rates won't be rising for a very long time.
We think the first hike won't occur until late 2015, or possibly even later," JPMorgan's chief market strategist
Thomas J. Lee said. "The continued gentle posture of monetary policy should keep financial conditions
supportive, helping to offset some of the drag imposed by fiscal policy."

The mindset has led managers dangerously up the ladder in risk, particularly in the high-yield area of fixed
income. Though they saw outflows in November, junk bond mutual funds have seen assets under management
grow 19 percent this year as investors grope for yield in a no-yield environment.

Wells Fargo's Doss said he is afraid of high-yield in corporate debt but favors it in municipal bonds, and
otherwise is putting focusing on risk in the equity and commodity markets.

It's all part of the brave new central banking world.

"We're in open-ended QE across the globe," Doss said. "I don't know what the end game is."


To top