Economics news digest

Ben Bernanke underlines the continued threat posed by global imbalances to the world economy. But some commentators are sceptical about the impact of his remarks, pointing out that influential policymakers have made similar comments before. The dollar’s weakness is helping long-suffering US manufacturers, but is posing worries for EU finance ministers who are demonstrating the limits of their ability to influence the euro’s exchange rate, according to the FT. China’s de-facto dollar peg is a potential threat to the revival of the production networks within East Asia, an Asian policy expert says. FT Alphaville says that questions over the sustainability of Asia’s economic growth and talk of higher-than-expected inflation cloud the otherwise sunny picture painted when Australia’s central bank became the first to raise interest rates since the peak of the financial crisis.An FT commentator describes Brazil as the 21st century power to watch, as it slaps on a tax on capital inflows in an effort to check the breakneck appreciation of its currency against the dollar. An IMF expert says Latin American central banks seem to have weathered the global crisis quite well, while an IMF blog explains why the region has performed as well as, if not better than other emerging market economies.The Federal Reserve Bank of San Francisco points out that although growth has returned, the economy will remain in a deep hole with high unemployment for some time to come. Unemployment is particularly hitting workers who found jobs through temporary employment agencies, according to United Nations report. The contrast between soaring unemployment rates and the bail-outs for the banks is criticised by a New York Times commentator. The French finance minister rejects calls for a 10 per cent tax on banking profits, although there are plans for new “fees” for the industry to pay for increased supervision. Meanwhile a UK trade minister says regulators must amend global rules to encourage banks to finance international commerce and business growth rather than risky trading.

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