World Bank chief economist Carmen Reinhart earlier this week said that the COVID-19 pandemic is turning into a major economic crisis and warned of the possibility of a financial crisis emerging.
“This did not start as a financial crisis, but it is morphing into a major economic crisis, with very serious financial consequences,” Reinhart said. “There’s a long road ahead.”
Reinhart, who took her new role in June, is best known for her work with Kenneth Rogoff, a professor at Harvard University, on the last financial crisis in their 2009 book This Time Is Different: Eight Centuries of Financial Folly.
Photo: EPA-EFE
It made the pair the go-to resource on the history of government defaults, recessions, bank runs, currency sell-offs, and inflationary spikes.
Asked whether central banks buying bonds to keep yields low is ultimately a zero-sum game when everyone is doing it, Reinhart said: “This is a war. During wars governments finance their war expenditures however they can, and right now there are dire needs.”
“The scenario we are in is not a sustainable one,” she added.
Reinhart made the remarks after the world’s richest nations agreed to renew a debt relief initiative for the poorest countries through at least the first half of next year, falling short of the World Bank’s call for a full-year extension.
China is owed almost 60 percent of the money that the world’s poorest nations would be due to repay this year, World Bank data showed.
It has made many loans to developing countries with terms that are not transparent and at higher interest rates than the nations can afford, World Bank president David Malpass said in August.
Asked about China not participating in the debt relief initiative, Reinhart said that Beijing was in fact involved, just “less than fully.”
The China Development Bank, a major lender, has not joined the effort, nor have private sector creditors, she said.
“Full participation is something we should strive for but unfortunately haven’t yet seen,” Reinhart added.
KEEPING UP: The acquisition of a cleanroom in Taiwan would enable Micron to increase production in a market where demand continues to outpace supply, a Micron official said Micron Technology Inc has signed a letter of intent to buy a fabrication site in Taiwan from Powerchip Semiconductor Manufacturing Corp (力積電) for US$1.8 billion to expand its production of memory chips. Micron would take control of the P5 site in Miaoli County’s Tongluo Township (銅鑼) and plans to ramp up DRAM production in phases after the transaction closes in the second quarter, the company said in a statement on Saturday. The acquisition includes an existing 12 inch fab cleanroom of 27,871m2 and would further position Micron to address growing global demand for memory solutions, the company said. Micron expects the transaction to
Nvidia Corp’s GB300 platform is expected to account for 70 to 80 percent of global artificial intelligence (AI) server rack shipments this year, while adoption of its next-generation Vera Rubin 200 platform is to gradually gain momentum after the third quarter of the year, TrendForce Corp (集邦科技) said. Servers based on Nvidia’s GB300 chips entered mass production last quarter and they are expected to become the mainstay models for Taiwanese server manufacturers this year, Trendforce analyst Frank Kung (龔明德) said in an interview. This year is expected to be a breakout year for AI servers based on a variety of chips, as
Global semiconductor stocks advanced yesterday, as comments by Nvidia Corp chief executive officer Jensen Huang (黃仁勳) at Davos, Switzerland, helped reinforce investor enthusiasm for artificial intelligence (AI). Samsung Electronics Co gained as much as 5 percent to an all-time high, helping drive South Korea’s benchmark KOSPI above 5,000 for the first time. That came after the Philadelphia Semiconductor Index rose more than 3 percent to a fresh record on Wednesday, with a boost from Nvidia. The gains came amid broad risk-on trade after US President Donald Trump withdrew his threat of tariffs on some European nations over backing for Greenland. Huang further
HSBC Bank Taiwan Ltd (匯豐台灣商銀) and the Taiwan High Prosecutors Office recently signed a memorandum of understanding (MOU) to enhance cooperation on the suspicious transaction analysis mechanism. This landmark agreement makes HSBC the first foreign bank in Taiwan to establish such a partnership with the High Prosecutors Office, underscoring its commitment to active anti-fraud initiatives, financial inclusion, and the “Treating Customers Fairly” principle. Through this deep public-private collaboration, both parties aim to co-create a secure financial ecosystem via early warning detection and precise fraud prevention technologies. At the signing ceremony, HSBC Taiwan CEO and head of banking Adam Chen (陳志堅)
RSS