Thursday, October 14, 2010
All eyes on financial Hub
Boston will be the hub of the financial universe over the next few days as a trio of economic titans - President Obama, Fed chief Ben Bernanke and Bank of America’s Brian Moynihan - all make key appearances here.
Moynihan, who heads the nation’s largest commercial bank, will get the ball rolling today with a speech before the Boston College Chief Executives’ Club.
He’ll be followed tomorrow by Bernanke, who’s set to give the keynote address at the Federal Reserve Bank of Boston’s 55th annual economic conference.
Boston Fed chief Eric Rosengren will then address the Fed gathering Saturday, a few hours before Obama speaks at an unrelated rally for Gov. Deval Patrick’s re-election campaign.
And Sunday, some 1,500 financial staffers will gather at the Hynes Convention Center to open the American Bankers Association’s annual convention.
Experts say the powerhouse events all speak well of the Hub’s importance to the U.S. economy.
“We really are the Athens of America,” said Peter Rollins of the Chief Executives’ Club. “There’s not a topic that’s being discussed in America today that’s not being discussed within a 10-mile radius of Boston.”
However, all four gatherings will have their share of controversy:
Moynihan is appearing just days after Bank of America halted all U.S. foreclosures and admitted it might have seized thousands of homes using faulty paperwork.
Rollins said the CEO has indicated he’ll address the scandal in his speech and in subsequent remarks to the press.
Bernanke will likely use his speech to give markets further signals about the Fed’s controversial “Quantitative Easing 2”plan, known as “QE2.”
With quantitative easing, the Fed buys up U.S. mortgage and Treasury bonds to drive down interest rates - a move the central bank already tried early in the recession.
This effort can drive down long-term interest rates and stimulate growth, but in theory also risks sparking inflation by pouring too much money into the economy.
Obama is appearing at a time when he’s locked in a fight with Republicans over whether to extend President George W. Bush’s tax cuts, which are scheduled to “sunset” on Dec. 31.
“The standoff essentially means nobody knows what’s going to happen to their taxes come January - and that’s stupid,” said economist Nariman Behravesh of Lexington’s IHS Global Insight. “The last thing the economy needs at this point is more uncertainty.”
Local activists plan to picket the bankers’ convention to call for a permanent end to foreclosures.
“We want to tell the banks that they haven’t been very good about instituting policies that would solve the foreclosure crisis and get America out of today’s overall economic crisis,” said Steve Meacham of City Life, one of the groups organizing Sunday’s protest.
http://www.bostonherald.com/business/general/view.bg?articleid=1288660
