Episode 102
William White | Financial Fault Lines, Central Banks, and the Law of Unintended Consequences
Episode 102
William R. White
William White | Financial Fault Lines, Central Banks, and the Law of Unintended Consequences
summary
In this week’s episode of Hidden Forces, Demetri Kofinas speaks with economist and former Deputy Governor of the Bank of Canada, William White, about the state of our market economy and the prospects for an ‘international reset’ of the global financial system.
William R. White was most recently chairman of the Economic and Development Review Committee at the Organization for Economic Co-operation and Development (OECD) from 2009 to 2018. He is famous for having flagged the wild behavior in debt markets before the Great Financial Crisis of 2008. He began his career in 1969 as an economist working at the Bank of England. In 1972 he joined the Bank of Canada where he spent 22 years and was appointed Deputy Governor in September 1988. In 1994, he joined the Bank for International Settlements (BIS) and served as its Economic Adviser and Head of the Monetary and Economic Department from May 1995 to June 2008.
In their conversation, Demetri and Dr. White discuss a wide range of topics focused primarily on the global financial system. Their conversation begins with a focus on the state of the current system, including a discussion about the consequences of regulatory reform (both intended and unintended), as well as endogenous transformation to the system brought about by independent changes in the behavior of banks and other financial participants. Most of the conversation dealing with possible changes to the International Monetary and Financial System happen during the Episode Overtime, including a discussion about central bank-issued cryptocurrencies, private sector digital money like Libra, and Bitcoin. The overtime also includes a lengthy discussion about government policy in the face of climate change, and how this relates to the politics of monetary policy.
William White has spent five decades as a central banker and international financial policymaker, and we are fortunate beneficiaries of the wisdom that he has accrued during these many years.
Additional topics discussed during the episode include post-crisis reform, market architecture, currency wars, negative interest rates, the Chinese renminbi, causes for inflation, Japanification, the ‘Global Ring of Fire,’ and much more.
You can access the rundown to this week’s episode, along with a transcript of Demetri and Dr. White’s conversation through the Hidden Forces Supercast Page. All subscribers are granted access to our overtime feed, which can be easily added to your favorite podcast application.
Producer & Host: Demetri Kofinas
Editor & Engineer: Stylianos Nicolaou
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bio
William R. White is currently a Senior Fellow at the C.D. Howe Institute in Toronto, Canada. Until April of 2018, he was the chairman of the Economic and Development Review Committee at the OECD in Paris. This committee carries on regular evaluations of the policies of both member countries and aspiring members of the OECD. In his capacity as chairman, to which he was appointed in October 2009, William White also contributed to meetings of WP1 and the Economic Policy Committee of the OECD. As well, he was for four years a member of the Issing Committee, advising the German chancellor on G-20 issues. William White has in recent years published many articles on topics related to monetary and financial stability as well as the process of international cooperation in these areas. He speaks regularly to a wide range of audiences.
Dr. White was presented in September with the 2016 “Adam Smith Prize”, the highest award of the National Association of Business Economists (US). In May of 2015, he was honored with the “Hans-Moller-Medal” from VAC, the alumni club of political economists at Ludwig-Maximilian University of Munich. Prior to that, he received the annual “Prize of the Monetary Workshop on Monetary, Financial and Macro-Prudential Policy “in Frankfurt in May 2014.
Dr. White joined the Bank for International Settlements in June 1994 as Manager in the Monetary and Economic Department and was appointed to the position of Economic Adviser and Head of the Monetary and Economic Department (MED), in May 1995. He oversaw the preparation of the prestigious BIS Annual Report for which he wrote the Introduction and Conclusions. As Head of the MED, he had overall responsibility for the department’s output of research, data and information services, and the organization of meetings for central bank Governors and staff around the world.
Dr. White was also a member of the Executive Committee which manages the BIS. In this capacity, he contributed actively to various internal subcommittees which establish policies to guide the Bank’s overall activities, including those of the Banking Department and Risk Control. He retired from the BIS on 30 June 2008.
Dr. White began his professional career at the Bank of England, where he was an economist from 1969 to 1972. Subsequently, he spent 22 years with the Bank of Canada. His first six years at the Bank of Canada were with the Department of Banking and Financial Analysis, first as an economist and finally as Deputy Chief. In1978, Dr. White took on different responsibilities as the Deputy Chief of the Research Department and was made Chief of the Department in 1979. He was appointed Adviser to the Governor in 1984 and Deputy Governor of the Bank of Canada on September 1988.
In addition to these permanent positions, Dr. White spent six months (1985- 86) as a Special Adviser to the Canadian Minister of Finance and six years as a member of Statistics Canada’s Advisory Panel on the National Income Accounts. Since the late 1980s, he has been an active participant in many international committees, including the EPC and WP3 at the OECD, the G-10 Deputies, and the Bellagio Group which brings together senior government officials, central bankers, and academics.
Born in Kenora, Ontario, Dr. White received his BA from the University of Windsor in Windsor, Canada. In 1969 he received his Ph.D. from the University of Manchester, UK, where he was supported by a Commonwealth Scholarship.
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Duo Reges: constructio interrete. Tum ille: Tu autem cum ipse tantum librorum habeas, quos hic tandem requiris? Expectoque quid ad id, quod quaerebam, respondeas. Legimus tamen Diogenem, Antipatrum, Mnesarchum, Panaetium, multos alios in primisque familiarem nostrum Posidonium.
Sed haec quidem liberius ab eo dicuntur et saepius. Sed quae tandem ista ratio est? Possumusne ergo in vita summum bonum dicere, cum id ne in cena quidem posse videamur? Non dolere, inquam, istud quam vim habeat postea videro;
Tum mihi Piso: Quid ergo? Hoc est non dividere, sed frangere. Ita multo sanguine profuso in laetitia et in victoria est mortuus. Vitae autem degendae ratio maxime quidem illis placuit quieta. Certe, nisi voluptatem tanti aestimaretis.
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Lorem ipsum dolor sit amet, consectetur adipiscing elit. Haec non erant eius, qui innumerabilis mundos infinitasque regiones, quarum nulla esset ora, nulla extremitas, mente peragravisset. Non enim in ipsa sapientia positum est beatum esse, sed in iis rebus, quas sapientia comparat ad voluptatem. Primum divisit ineleganter; Tollenda est atque extrahenda radicitus. Sin aliud quid voles, postea. Duo Reges: constructio interrete.
Quae tamen a te agetur non melior, quam illae sunt, quas interdum optines. Equidem e Cn. Nihil opus est exemplis hoc facere longius. Ut placet, inquit, etsi enim illud erat aptius, aequum cuique concedere.
Omnia contraria, quos etiam insanos esse vultis. Huius ego nunc auctoritatem sequens idem faciam. Quid ei reliquisti, nisi te, quoquo modo loqueretur, intellegere, quid diceret? Qui-vere falsone, quaerere mittimus-dicitur oculis se privasse; Quare attende, quaeso. Quod idem cum vestri faciant, non satis magnam tribuunt inventoribus gratiam. Bonum negas esse divitias, praeposìtum esse dicis?
Ita relinquet duas, de quibus etiam atque etiam consideret. Hoc non est positum in nostra actione. Quae iam oratio non a philosopho aliquo, sed a censore opprimenda est. Quid igitur, inquit, eos responsuros putas?
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Lorem ipsum dolor sit amet, consectetur adipiscing elit. Tollitur beneficium, tollitur gratia, quae sunt vincla concordiae. Nec vero pietas adversus deos nec quanta iis gratia debeatur sine explicatione naturae intellegi potest. Hanc quoque iucunditatem, si vis, transfer in animum; Quibus rebus vita consentiens virtutibusque respondens recta et honesta et constans et naturae congruens existimari potest. Saepe ab Aristotele, a Theophrasto mirabiliter est laudata per se ipsa rerum scientia; Ego vero volo in virtute vim esse quam maximam; Duo Reges: constructio interrete. Nihil opus est exemplis hoc facere longius. Idem iste, inquam, de voluptate quid sentit?
Quid, si reviviscant Platonis illi et deinceps qui eorum auditores fuerunt, et tecum ita loquantur? Non risu potius quam oratione eiciendum? Frater et T. Non modo carum sibi quemque, verum etiam vehementer carum esse? Vitae autem degendae ratio maxime quidem illis placuit quieta. Quo modo autem philosophus loquitur? Atqui perspicuum est hominem e corpore animoque constare, cum primae sint animi partes, secundae corporis. Cum autem in quo sapienter dicimus, id a primo rectissime dicitur. Age, inquies, ista parva sunt. Bonum incolumis acies: misera caecitas.
Gloriosa ostentatio in constituendo summo bono. Tamen aberramus a proposito, et, ne longius, prorsus, inquam, Piso, si ista mala sunt, placet. Sin laboramus, quis est, qui alienae modum statuat industriae? Isto modo, ne si avia quidem eius nata non esset.
Scio enim esse quosdam, qui quavis lingua philosophari possint; At cum de plurimis eadem dicit, tum certe de maximis. Nonne videmus quanta perturbatio rerum omnium consequatur, quanta confusio? Mihi quidem Antiochum, quem audis, satis belle videris attendere. Nondum autem explanatum satis, erat, quid maxime natura vellet. Habes, inquam, Cato, formam eorum, de quibus loquor, philosophorum. Idemne potest esse dies saepius, qui semel fuit? Atque haec ita iustitiae propria sunt, ut sint virtutum reliquarum communia. Indicant pueri, in quibus ut in speculis natura cernitur. Quorum altera prosunt, nocent altera. Indicant pueri, in quibus ut in speculis natura cernitur. Negat esse eam, inquit, propter se expetendam.
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Lorem ipsum dolor sit amet, consectetur adipiscing elit. Atque haec coniunctio confusioque virtutum tamen a philosophis ratione quadam distinguitur. Quid ei reliquisti, nisi te, quoquo modo loqueretur, intellegere, quid diceret? Commoda autem et incommoda in eo genere sunt, quae praeposita et reiecta diximus; Nemo igitur esse beatus potest. Venit ad extremum; Duo Reges: constructio interrete. Respondent extrema primis, media utrisque, omnia omnibus.
Si quicquam extra virtutem habeatur in bonis. Idemne potest esse dies saepius, qui semel fuit? Illud non continuo, ut aeque incontentae. Quodsi vultum tibi, si incessum fingeres, quo gravior viderere, non esses tui similis; Quicquid porro animo cernimus, id omne oritur a sensibus; Ergo in gubernando nihil, in officio plurimum interest, quo in genere peccetur. Hoc positum in Phaedro a Platone probavit Epicurus sensitque in omni disputatione id fieri oportere. Varietates autem iniurasque fortunae facile veteres philosophorum praeceptis instituta vita superabat. Haeret in salebra. Ita prorsus, inquam; Cui Tubuli nomen odio non est?
Vos autem cum perspicuis dubia debeatis illustrare, dubiis perspicua conamini tollere. De hominibus dici non necesse est. Propter nos enim illam, non propter eam nosmet ipsos diligimus. Quid enim ab antiquis ex eo genere, quod ad disserendum valet, praetermissum est? Haec bene dicuntur, nec ego repugno, sed inter sese ipsa pugnant. Duarum enim vitarum nobis erunt instituta capienda. Falli igitur possumus. Quid affers, cur Thorius, cur Caius Postumius, cur omnium horum magister, Orata, non iucundissime vixerit? Quid turpius quam sapientis vitam ex insipientium sermone pendere?
Cupit enim dícere nihil posse ad beatam vitam deesse sapienti. Non est ista, inquam, Piso, magna dissensio. Nemo igitur esse beatus potest. Nam ante Aristippus, et ille melius. Teneo, inquit, finem illi videri nihil dolere.