Category Archives: Geen categorie

Everything you need to know about Monetary Policy Decisions

Last Thursday, the ECB published yet another monetary policy decision. Given that the ECB and its monetary policy are one of the cornerstones of our economy, it’s surprising how little attention there is – both in the media as in class -for the monetary policy decision and the press conference in which the policy is announced – in fact, the only mentioning of the monetary policy of the ECB was in June this year, when the ECB announce to quit – in a considerable amount of time – the quantitative easing.
So, for those interested in monetary policy: Here’s how to watch, listen and follow the press conferences of mr. Mario Draghi.
1. To QE or not QE? For those who are not familiar with QE, a very short introduction. Usually, the ECB conducts monetary policy via the interbanking lending market. However, due to the Global Financial Crisis, this lending market has dried up and can no longer be used to conduct monetary policy. Instead, the ECB introduced QE: Buying of assets (for instance, bonds), as to provide liquidity to the market and being able to steer interest rates.
2. It’s the delta that counts. The larger part of text of the monetary policy decision remains the same. This, by the way, also goes for other text. As for the ECB, don’t pay attention to phrases like ‘continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term’. These will always pop up in press conferences. Actually, the whole press conference can be summarized in just a few numbers and dates: What are going to be the key interest rates (that is, the interest rates the ECB uses for the interbanking lending market), and, in the case of QE, the size of monthly purchases and the moment of . The latter determines when the balance of the ECB will start to shrink again. Remind yourself that (for instance) state bonds will be repaid at a certain moment. If not reinvested, this will lead to a shrinking of the balance of the ECB.
3. Take into account market expectations to understand what’s happening at financial markets. Suppose, for instance, that the market expects Draghi to announce that the ECB will stop QE directly, while Draghi actually announces that QE will remain for at least three months. In the absence of market expectation, markets could react with rising interest rates, but as they were expecting a tightening of monetary policy anyway, the interest rate can decrease.
And remember, every six weeks, the ECB will give an update.



Future of Fossil Fuels From Thin Air

Fighting  for the environment can be done in multiple ways. Reducing the cost or accessibility of renewables is one way – energy sell-back, subsidies, and new technologies. More recently, EU decided to tackle 10 biggest single-use plastics within their jurisdiction, hoping to “deliver tangible results [..] before the elections in May 2019”. Those methods concentrate on avoiding future build-up of pollution.

However there is another aspect that needs to be focused on: repairing the damages already caused. It’s uplifting hearing about another country running solely on renewables for X days in a row, or the fact that biggest ocean pollutants are being phased out of our lifestyles but reduction of the build-up is also important . New ocean cleaning initiatives, carbon sucking towers, reforestation are all methods to combat the pre-existing depreciation of our planet. In all of this, a peer reviewed article from Carbon Engineering from a week ago gave another promising opportunity in carbon elimination through Direct Air Capture (DAC)*.


The BoFEB-traineeship

September 1st, I started the BoFEB. This article will give you a short introduction into what the BoFEB (Beroepsopleiding Financiaal-Economisch Beleidsmedewerker, or entails and, more importantly, how to get in.

Art Mural Palais De Tokyo Musée D'art Modern Museum

Learning by Youtubing

Online education has become a very popular mean of learning in present times. The raise of the internet has allowed for people of all backgrounds and interests to access thousands, if not, millions of resources of information of any field. The best thing is that many of these resources do not constrain people in terms of money as they are free and sometimes, very cheap. In this article, I want to talk about the type of information we consume out of curiosity and in our free time. This is a kind of informal education that has become very popular in the last years with the raise of the internet. After all, we as humans are very curious by nature and we will ask questions when we face something that interests us, even if it’s not in our field of expertise.