The Alchemists: Three Central Bankers and a World on Fire (66 page)

Papademos, Lucas, 225, 342, 347, 353–54

Papadia, Francesco, 152

as ECB markets desk head, 1

Papandreou, George, 202, 214–15, 287, 297, 306, 309–11, 341

referendum on euro, 343, 345

Paper money, origin of, 22–23

Paris Club, 114

Parkinson, Patrick, 140

Paul, Ron, 170–71, 174–75, 185–86, 197

Paulson, Hank

and Lehman collapse, 142, 144–45

and TARP, 156–57

Peach, Richard, 104

People’s Bank of China

bond market of, 370–71

creation of, 362

currency swaps, 371–72

financial crisis remedies (2008–2009), 365–66

functions of, 362–64

governor of.
See
Zhou Xiaochuan

policymaking secrecy, 363–64, 373–74

Zhou reforms/programs, 369–73, 375–76

Perry, Rick, 327–28

Peston, Robert, 127

Peterson, Pete, 62

Pianalto, Sandra, 258

PIIGS nations, 213

Pimlott, Daniel, 249–50

Plosser, Charles, 192, 196, 258, 264, 275, 330, 332, 337, 385

Pooling, 74–75

Portugal financial crisis, 296–98

deficit reduction, 220, 353

ECB bond buying program, 287, 295

Posen, Adam, 247, 250, 252–53, 334, 337, 390

Powell, Jay, 385

Price increases.
See also
Inflation

self-perpetuation of, 65–66, 134–35

Privatization

Greece, 309–16

Italy, 319

Provopoulos, George, 201–2, 203, 215

Quantitative easing

by Bank of England (2009), 238–41

by Bank of England (2011), 334–36, 340

by Bank of Japan (2000), 90–91, 255

by Fed (QE1), 263

by Fed, second round.
See
Quantitative easing (QE2)

goals of, 238–39, 255

Quantitative easing (QE2), 255–80

Bernanke briefing in South Korea about, 273–74

economic rationale for, 259–61, 263–65, 267–70

effectiveness of, 279–80, 328

execution of purchase, 277–78

FOMC meeting on, 254–55, 274–76

goals of, 255, 374–75

implementation strategies, 272–73

negative reaction to, 256–58, 274, 275–76, 278–80, 328–29, 374–75

portfolio balance channel, 331

risks of, 267, 271–72, 274

Quantum Fund, 73

Rajan, Raghuram, 107–8

Rajoy, Mariano, 348

Ranieri, Lewis, 5

Raskin, Sarah Bloom, 275

Real estate prices.
See
Housing prices

Recessions

and bank failures, 3, 23, 33–34, 39–40

and end of inflation of 1970s, 70–71

eurozone (2012), 354–55

during Greenspan tenure, 95, 99

Reed, James A., 45

Rehn, Olli, 209–10

Reichsbank, 47–53

creation of, 47

gold for paper money swap, 48–49

Great Depression measures, 58–60

hyperinflation, pre–Nazi era, 11, 50–53

paper money mass issuance (1914–1918), 48–49

Reid, Harry, 146

Rentenmark, origin of, 54

Republicans

anti-Bernanke, 184, 190–92, 327–28, 330

QE2, objection to, 256

Reserve Primary Fund, 147–48

Riksbank, 152

Robertson, Linda, 177, 189–90, 193, 195

Romer, Christina, 338

Roosevelt, Franklin Delano

gold standard abandoned, 60–61

“try it all” approach, 149–50

Rosengren, Eric, 264, 271, 275

Roumeliotis, Panagiotis, 341–42

Royal Bank of Scotland, 154

Royal Exchange, 31

Rubin, Robert, 94

Ryan, Paul, 256

Sack, Brian, 270

Salary cuts, as deficit reduction, 302–3, 309–10

Salary increases, and inflation, 65–66, 134–35

Salstrom, Sandra, 254–55

Samaras, Antonis, 310, 342, 345, 354

Samuelson, Paul, 65

Sanders, Bernie, 175–76, 189, 197–98

San Francisco earthquake (1906), 40

Sarkozy, Nicolas, 159, 211

bondholders pay bailouts decision, 289–92

on EFSF bank charter, 326

-Merkel relationship, 287–92, 356

Savings & loan bank failures (1980s), 79

Schabowski, Günter, 76

Schacht, Hjalmar Horace Greeley, Great Depression, actions during, 53–54, 57, 60

Schäuble, Wolfgang, 228, 257, 289, 290, 380, 382

Schmidt, Helmut, 325

Schultz, George, 62–63

Schuman, Robert, 74

Schumer, Chuck, 186

Seasonal loans, 40, 42–43

Second Bank of the United States (1816), 37–39

Securities Markets Programme (SMP)

Greece bailout, 286–89, 310–11

initial proposal for, 220–23

Ireland bailout, 283–84, 287, 294–96

Italy bailout, 319–22, 347–48

opposition to, 229–32, 320, 322–23

Portugal bailout, 295

reactivation of (2011), 317–18

Spain bailout, 287, 320–21

suspension of, 304–5

Sentance, Andrew, 252

September 11 attack, economic remedies following, 98–99, 130

Sheets, Nathan, 227

Shelby, Richard, 174, 184–85, 261

Shiller, Robert, 112

Skidmore, David, 4

Smith, George Ross, 45

Smith, Michelle, 5, 193

Sócrates, José, 296

Soini, Timo, 297

Solow, Robert, 65, 116

Soros, George, 72–74

South Korea, Group of 20 meeting (2010), 257, 273–74

Spain financial crisis, 317–23

ECB bond buying program, 287, 320–21

fiscal reforms, 353

housing price increase (2005), 100–101

Speer, David, 261

Stagflation, Great Britain (2010–2011), 251–53, 334

Stamp, Josiah, 388

Stark, Jürgen

ECB bond buying opposition, 220–21, 229, 320–21

economic orientation, 300

and Greek crisis, 209–10

resignation of, 322–23

Stein, Herbert, 62

Stein, Jeremy, 385

Steinbrück, Peer, 159

Stockholms Banco, 17–24

collapse (1668), 17–18, 23

innovations/failures of, 18–23

lessons learned, 23–24

Stock market.
See
Financial markets

Stockton, David, 106, 265

Strauss-Kahn, Dominique, 206, 219, 230, 286, 308

Strong, Benjamin, 41, 56

Summers, Larry, 94, 181–82

Super Mario Brothers.
See
Draghi, Mario; Monti, Mario

Susman, Louis, 243, 250–51

Sveriges Riksbank, 24

Sweden

central bank, first, 24

Stockholms Banco innovations/failure, 17–24

Sveriges Riksbank as central bank, 24

Swiss National Bank, 130, 153

eurozone interventions by, 349–50

Switzerland, central bank.
See
Swiss National Bank

Székely, István, 284

TARP (Troubled Asset Relief Program), 156–57

Tarullo, Daniel, 179

Taxes, U.S., and political unity, 78

Taylor, John, 97

Teal Book, 262, 330

Terkel, Studs, 61

Term Auction Facility (TAF), 131–32

Thatcher, Margaret, 72

Thomsen, Poul, 285, 309

Tipping point theory, 267–68

Tobin, James, 70

Treasury securities

Fed large-scale bond purchase.
See
Quantitative easing

liquidity of, 236

Tremonti, Giulio, 319

Trichet, Jean-Claude.
See also
European Central Bank (ECB) remedies

background information, 12, 112–15

beginning crisis, view of, 7, 128, 135, 137

BNP Paribas crisis as first, 1–3

on coordination of remedies, 159–61

economic orientation of, 115, 287

Eurogroup meeting protest, 306–7

Franco-German Declaration criticism by, 290–92

-Geithner relationship, 219, 317

Governing Council meetings, role at, 136–37

on Greek financial crisis, 204, 206–8, 211–12, 218–19, 222–23, 287

on Italy/Spain crises, 317–23

at Jackson Hole conference, 97

on Lehman failure, 143

at Maastricht negotiations, 77, 114

nomination as ECB president, 81–82

personal traits, 114–15

poor decisions of, 135–37, 212–13, 303–5

as “president” of Europe, 322

retirement gala, 324–26

-Sarkozy dispute, 324

successor to.
See
Draghi, Mario

on Term Auction Facility (TAF), 131–32

True Finns, 297

Trust Company of America, 41

Tucker, Paul, 241, 388

Twisting the yield curve, 331–32

Tyrie, Andrew, 250

Ueda, Kazuo, 89, 91–92

Ullstein, Leopold, 52

Unemployment

Great Britain (2009–2011), 236, 248, 251, 334

Great Depression era, 57, 58, 60

during Greenspan tenure, 94, 99

during inflation of 1970s, 65

Ireland (2010), 284

level in 2009, 188

U.S. weak jobs growth, 259, 268–69, 328, 378

United Copper, 40–41

United States

annual growth needs, 267

central bank.
See
Federal Reserve

federal credit rating downgraded, 317

financial crises.
See
U.S. financial crises; U.S. financial crisis (2007–2012)

history of banking in.
See
U.S. banking history

U.S. banking history, 35–46

Aldrich-Vreeland Act (1908), 43

antibank sentiments, 37–38, 43–46

Bank of the United States (1791), 37

Federal Deposit Insurance Corporation, 77–78

Federal Reserve Act (1913), 45–46

Federal Reserve System, 44–45

First Name Club efforts (1910), 35–36, 43–44

Free Banking Era, 39

National Banking Act (1863), 39

national currency, nonexistence of, 39

National Monetary Commission (1908), 43

National Reserve Association, 43

Second Bank of the United States (1816), 37–39

U.S. financial crises

bank failures (1870s), 39–40

bank panics (1837,1839,1857), 39

depression (1929–).
See
Great Depression

inflation (1971–1979), 62–71

Panic of 1907, 40–43

and September 11 attacks, 99, 130

of 2007–2012.
See
U.S. financial crisis (2007-2012)

U.S. financial crisis (2007–2012)

AIG collapse, 145–47

Bear Stearns collapse, 132–33

and Chinese economy, 364–66

commodity price increases, 134–35, 137

federal debt (2009), 236

financial reform following.
See
U.S. financial reform

home price increases by 2005, 99

household debt increase, 100

housing bubble, central bankers fears (2005), 104–8

Lehman Brothers collapse, 139–43

money market funds, dangers to, 148–49

and mortgage-backed securities, 101–3, 129

and mortgage products, new, 99–100

negative economic indicators (2010–2011), 259–61, 263–65, 267–70, 328

recession, official end (2009), 182

remedies.
See
Bernanke, Ben; Federal Reserve remedies

stock market drops during, 145, 165, 218–19

TARP, 156–57

time line for, xi–xvii

U.S. financial reform

Audit the Fed proposal, 175–76, 185–86, 193–94, 197

and community banks, 178–80, 186–88, 192–93, 194–96

consumer protection, 185

Dodd-Frank Act, 185–88, 194–200

Fed as victor in, 199–200

Fed bashing as tactic, 172–81

Fed lobbying, 176–77, 181–82, 187–88, 192–93, 195–96

Fed opponents, 170–76, 185–86, 195–96, 198–99

Fed priorities, 178, 193–94

Fed supporters, 178–81, 185, 187–88

Fed transparency issue, 175–76, 197–98

original proposals, 185–88, 195–96

Paul-Grayson amendment, 186

Venizelos, Evangelos, 310, 314

Versailles, Treaty of, on German reparations, 49–50

Volcker, Paul

background information, 67–68

ends inflation (1970s), 67–71

on investment bank bailouts, 134

at Jackson Hole conference, 95–96

lasting achievement of, 71

during Nixon administration, 63

protests about policies of, 70–71, 96

Wallich, Henry, 68

Wall Street crash (1929), 56–58

Black Thursday, Dow drop on, 54

impact in Europe, 57–61

Warburg, Paul, 35

Wars, central bank financing of, 37, 39

Warsh, Kevin, 111, 133, 154, 193

QE2, objection to, 258, 264, 265–66, 276

role at Fed, 4, 265

Washington, George, 37

Watt, Mel, 185

Weale, Martin, 334

Weber, Axl

on bond buying proposal, 220–22

ECB bond buying opposition, 229–32, 351

ECB presidency loss, 299–300

resignation of, 298–99

Weidmann, Jens

as Bundesbank head, 318, 323

Draghi policies, opposition to, 381–84

economic orientation of, 323

Weinberger, Caspar, 62–63

Wellink, Nout, 229

WikiLeaks, 250

Williams, John, 385

Wilson, Woodrow, 44–45

Witmacher, Hans, 19.
See also
Palmstruch, Johan

Wolfensohn, James, 118

Wolin, Neal, 172–73

Woodford, Michael, 378–79, 386, 390

Woodstock, Vermont conference (1999), 84–85, 91–92

Woodward, Bob, 94

World War I

financing by Germany, 48–50

German hyperinflation after, 50–53

German reparations after, 49–50

World War II

economic unity, postwar, 74–75

and European economic crisis, 11

Nazi rise, reasons for, 11, 50–53

Wu Jinglian, 368

Wu Xiaoling, 366

Xi Jinping, 363

Yellen, Janet, 96, 257, 264, 269, 275, 385

Yom Kippur War (1973), 66

Young, Roy, 56

Zaitech
, 85–86

Zapatero, José Luis, 320, 342

Zero-interest rate, Japan (1990s), 87–88, 90–92

Zhou Xiaochuan, 361–76

background information, 367–69, 372–73

on Chinese versus Western economic policy, 361–62