Tag: central bank

What is ‘Helicopter Money’ Policy?

What is ‘Helicopter Money’ Policy?

Financial Markets Explained
Helicopter Money is a proposed alternative in the world of easy monetary policy. One could be forgiven to mistake the term as a phenomenon where loads of money is simply dropped from a Helicopter. Helicopter Money is seen by many critics as the next step after Quantitative Easing. Helicopter Money, although might seem new to many has been around for years. The term is attributed to Milton Friedman and his parable of 'Helicopter drop of money' in 1969. “Let us suppose now that one day a helicopter flies over this community and drops an additional $1000 in bills from the sky, .... Let us suppose further that everyone is convinced that this is a unique event which will never be repeated,” (Friedman 1969, pp 4–5) In this article you will learn how helicopter money works, how it can be implem
Dealing Desk or Non Dealing Desk? – The SNB Aftermath

Dealing Desk or Non Dealing Desk? – The SNB Aftermath

Trading Articles
Last week's Swiss National Bank shocker caught the markets off guard posting heavy casualties which was felt more with the retail forex trading industry. Traders and brokers alike got caught up in a black swan event which led to quite a few brokers going bust while some reputable brokerages seeking capital to continue to keep up with the operations. The event has also given rise to the age old debate of which of the two main models of trading execution is better, market makers (also referred to as dealing desk brokers) or agency model brokers (referred to as non dealing desk brokers). In the aftermath of the Swiss shocker, in a typical reactionary mode, market makers were hailed as the heroes as they (the brokerages) managed to come out unscathed. But does this one instance justify h...
Why should you be paying attention to Central Banks

Why should you be paying attention to Central Banks

Financial Markets Explained
The Forex markets have seen a new entrant, the likes of the Central Bank now getting directly involved in their respective currencies. Being the largest institutional liquidity provider, the role of the Central Banks has become increasingly influential in the forex markets. If interest rate decisions was the primary tool, we are now in the age of direct market intervention in the likes of quantitative easing or asset purchase program. It is no wonder then that monitoring the policies of these large institutions, from a trader's perspective is imperative. Commonly referred to as currency wars, a case in point can be derived from the US Federal Reserve Bank, which (along with other Central Banks) started injecting money into the financial markets (QE). If earlier the Central bank minutes ...