Federal Reserve chairman Jerome Powell greets Treasury Secretary Steven Mnuchin after testifying on the Fed’s pandemic response on June 30. The Fed has added an unprecedented US$3 trillion to its balance sheet so far this year. Photo: EPA-EFE Federal Reserve chairman Jerome Powell greets Treasury Secretary Steven Mnuchin after testifying on the Fed’s pandemic response on June 30. The Fed has added an unprecedented US$3 trillion to its balance sheet so far this year. Photo: EPA-EFE
Federal Reserve chairman Jerome Powell greets Treasury Secretary Steven Mnuchin after testifying on the Fed’s pandemic response on June 30. The Fed has added an unprecedented US$3 trillion to its balance sheet so far this year. Photo: EPA-EFE
Andrew Sheng
Opinion

Opinion

Andrew Sheng

Central banks’ coronavirus bailouts are distorting the market, but do they even realise it?

  • By hoovering up debt, central banks are becoming major market players. In capping bank dividends, they force prudent investors into a frothy market. Does anyone still believe that the central banks know what they are doing?

Federal Reserve chairman Jerome Powell greets Treasury Secretary Steven Mnuchin after testifying on the Fed’s pandemic response on June 30. The Fed has added an unprecedented US$3 trillion to its balance sheet so far this year. Photo: EPA-EFE Federal Reserve chairman Jerome Powell greets Treasury Secretary Steven Mnuchin after testifying on the Fed’s pandemic response on June 30. The Fed has added an unprecedented US$3 trillion to its balance sheet so far this year. Photo: EPA-EFE
Federal Reserve chairman Jerome Powell greets Treasury Secretary Steven Mnuchin after testifying on the Fed’s pandemic response on June 30. The Fed has added an unprecedented US$3 trillion to its balance sheet so far this year. Photo: EPA-EFE
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Andrew Sheng

Andrew Sheng

Andrew Sheng is a former central banker and financial regulator, currently distinguished fellow at the Asia Global Institute, University of Hong Kong. He writes widely on Asian perspectives on global issues, with columns in Project Syndicate, Asia News Network and Caijing/Caixin magazines. His latest book is “Shadow Banking in China”, co-authored with Ng Chow Soon, published by Wiley.