April 12 marks Equal Pay Day—symbolizing how far into the year women have to work on average before their earnings catch up with what men earned in the previous year. Women in the U.S. are still typically paid just79 cents for every dollar earned by men, despite the fact that the Equal Pay Act was enacted in 1963.

Big data professionals who crunch numbers for banks, accounting firms and even top-of-the-popularity lists like Google and Apple point out that women simply can’t do the ‘ask’ as well we men.  Companies are urged to hold training sessions at educational institutions, teaching women how to better assess their worth and then make more realistic and higher salary and benefit demands.  It is in companies’ interest because they want to diversify their wok force and add more women, and these sessions will improve their brand.

Here is where we are today.  While you have probably heard the 79 cents statistic before, there are a whole host of other, equally worrying numbers surrounding the pay gap and the plight of working women in the U.S. that might not be so familiar.

For example, the gender pay gap grows considerably with age, with women ages 55-64 earning just 76% of what their male peers are paid.

According to the 2016 American Association of University Women (AAUW)report, ‘The Simple Truth about the Gender Pay Gap,” race also plays a major role in the pay gap. In 2014, Hispanic and Latina women earned just 54% of what white men earned, American Indian and Alaska Native women just 59% and African American women 63%. White women, by comparison, earned 78% of white men’s earnings.

This has a major impact on women’s ability to pay off student debt. Four years after graduation, one study found that women working full-time had on average paid off 33% of their student loan debt, compared to men working full-time, who had paid off 44% of theirs. But African American and Hispanic women working full-time had been able to pay off less than 10% of their debt—much less than other women.

The pay gap also varies by state. According to American Community Survey (ACS) data, in 2014, the pay gap between year-round, full-time workers was smallest in Washington, D.C., where women were paid 90% of what men earned, and widest in Louisiana, where women earned 65% of what men earned.

There is also a stark difference between the earnings of mothers and fathers—while we mark Equal Pay Day in April for all women, if we were to compare the pay of parents, moms’ equal pay day would take place in early June, as it would take them nearly six extra months to earn what fathers earn in just one year. While working mothers earn less than childless women on average, men who become fathers actually earn more and are more likely to be hired than childless men.

Earnings also vary considerably between different fields, with women in financial management, for example, earning on average just 67% of what their male peers are paid. Traditionally female-dominated fields are often worse paid and less respected than those dominated by men. When women move into male-dominated occupations however, research suggests that rather than solving the problem, those fields tend to become less respected and lower paid as a result.

Contrary to one common argument, the pay gap cannot simply be explained by “women’s life choices.”  The report revealed that just one year after graduation, when many people have yet to think about starting a family, women working full time were paid, on average, just 82% of what their male peers earned.

Daniel Gros writes:  Central banks throughout the developed world have been overwhelmed by the fear of deflation. They shouldn’t be: The fear is unfounded, and the obsession with it is damaging.

Japan is a poster child for the fear. In 2013, decades of (gently) falling prices prompted the Bank of Japan to embark on an unprecedented monetary offensive. But while headline inflation increased for a while, the factors driving that increase – a competitive depreciation of the yen and a tax increase – did not last long. Now, the country is slipping back into near-deflation – a point that panicked headlines underscore.

Contrary to the impression created by media reports, the Japanese economy is far from moribund. Unemployment has virtually disappeared; the employment rate continues to reach new highs; and disposable income per capita is rising steadily. In fact, even during Japan’s so-called “lost decades,” per capita income grew by as much as it did in the United States and Europe, and the employment rate rose, suggesting that deflation may not be quite as nefarious as central bankers seem to believe.

In the US and Europe, there is also little sign of an economic calamity resulting from central banks’ failure to reach their inflation targets. Growth remains solid, if not spectacular, and employment is rising.

Central banks are focused on consumer prices, which is the wrong target.

Instead, central banks should focus on the rate of revenue increase, measured in nominal GDP growth; that is, after all, what matters for highly indebted governments and enterprises. By this measure, there is no deflation:

Moreover, nominal GDP growth exceeds the long-term interest rate. When, as is usually the case, the long-term interest rate is higher than the GDP growth rate, the wealthy may accumulate wealth faster than the rest of the economy.

One might expect this evidence to compel central bankers to rethink their current concerns about deflation.

Nominal interest rates are at zero, while the broadest price indices are increasing, albeit gently. Given that financing conditions are so favorable, it is not surprising that domestic demand has remained robust, allowing unemployment to return to pre-crisis lows almost everywhere.

The eurozone is the only large developed economy where unemployment remains substantial, and thus the only economy where the case could be made for a downside risk of deflation.

The only reason why unemployment remains high in the eurozone is that the labor-force participation rate has continued to increase throughout the recession; and, indeed, employment is returning to pre-crisis levels. This is the exact opposite of what the deflation hawks warn about.

The evidence is clear. Developed-economy central banks should overcome their irrational fear of a deflationary spiral, and stop trying desperately to stimulate demand. Otherwise, they will find themselves with massively expanded balance sheets, and very little to show for it.

Shadow Banking in the US SUmmarized   Prior to the 2008 financial crisis, the Federal Reserve had an important role – to solely act as a “lender of last resort” to traditional commercial banks. But during the crisis, the financial support was extended to many non-banking firms like money market mutual funds, the commercial paper market, mortgage-backed securities market and the tri-party repo market. Besides the extensive lending, non-commercial banks (also known as shadow banks) like Bear Stearns and Lehman Brothers were first to fail, triggering one of the worst financial crises across the world.

The US accounted for the largest shadow-banking sector, with $14.2 trillion in 2014.

Economist Paul McCulley, in his 2007 speech at the Annual Financial Symposium hosted by the Kansas City Federal Reserve Bank in Jackson Hole, Wyoming, coined the term “shadow bank.” Traditional commercial banks have been the driving force for creating liquidity in the economy. They accept the illiquid liabilities of both nonfinancial and financial entities for their own liquid liabilities and have access to the emergency funding of the Federal Reserve.

The shadow banking system, in contrast, introduced activities that generated liquidity through capital markets without public guarantees and provided access to the central bank as the “lender of last resort.” Unlike traditional commercial banks, shadow banks are unregulated and not subject to the traditional banking regulation system. This means that they cannot borrow in an emergency from the Federal Reserve, unlike traditional banks.

Investment banks, structured investment vehicles, hedge funds, non-bank financial institutions, money market funds, mutual funds and exchange-traded funds are all a part of the shadow banking system and are not required to maintain any reserves or emergency capital. “No regulations” in a “regulated environment” could be the biggest worry of the shadow banking system. Often beyond the control of regulators and monetary policy, shadow-banking activities can resort to risky lending. According to the New York Fed, shadow banks have “increased the fragility of the entire financial system.” While the total of non-bank financial intermediaries decreased immediately after the 2008 financial crisis, the number of shadow banks have picked up in recent years.

The vulnerabilities of the traditional banking system to the unregulated risks undertaken by the shadow banking system continue to threaten the financial system in 2016. According to the Financial Stability Board’s Global Shadow Banking Monitoring Report 2015, the United States accounted for the largest shadow-banking sector, with $14.2 trillion in 2014. With more than 80 percent of shadow banking activities residing in the advanced economies of North America, Asia and northern Europe, shadow banking could be one of the biggest threats to the current financial system. The report identifies the difficulty in assessing the amount of risk involved due to the lack of detailed data. The Financial Stability Board, an international board that monitors the global financial system, said the shadow-banking sector posed a huge risk of $36 trillion across 26 jurisdictions across the world in 2014.

Introduced in 2010, the Dodd-Frank financial regulations have been strict in reforming the “traditional part” of the banking system, but the regulations of shadow banks remain neglected. Along with many other rules, the big banks must maintain higher capital requirements and adhere to annual stress tests conducted by the Federal Reserve. But the tightening of commercial banks through banking regulations has encouraged a shift toward shadow banking.

In 2016, while traditional banks face the strict regulations of Dodd-Frank and Basel III (capital restrictions imposed on banks by the Bank for International Settlements to restore financial stability), shadow banks remain largely unmonitored and deeply entwined with the financial system. Federal Reserve Gov. Daniel Tarullo said in a speech in November 2015 that there is a possible risk in the financial stability “from activities mostly or completely outside the ambit of prudentially regulated firms.” He added, “Shadow banking is not a single, identifiable ‘system,’ but a constantly changing and largely unrelated set of intermediation activities pursued by very different types of financial market actors. Indeed, the very rigor of post-crisis reforms to prudential regulation may create new opportunities for such activities.” While traditional commercial banks may have benefitted from the Dodd-Frank law, large sections related to shadow banking remain largely neglected.

Democratic presidential hopeful Hillary Clinton has vowed to strengthen the Volcker Rule (a rule that prohibits an insured depository institution from engaging in proprietary trading) by “closing the loopholes that allow banks to make speculative gambles with taxpayer-backed deposits.”

She also has called for a new risk fee to be imposed on the nation’s largest banks. But while the Volcker Rule tries to separate banking activities from proprietary trading, interestingly, it excludes this distinction for non-banking financial companies. Hence, shadow banks continue to operate unregulated, without being subjected to any such prohibition under the Volcker Rule.

In order to address the issue of shadow banks, many politicians have been pushing for the restoration of the Glass-Steagall Act. Prior to the Great Depression in the 1930s, commercial banks were blamed for getting very speculative and greedy, since they were not only investing their assets, but also buying new issues for resale to the public. This led to a collapse of the banking system, which slowly became irresponsible and chaotic. One of the functional reforms that came in the form of banking regulations was called the Glass-Steagall Act, and it clearly outlined the objective of the banks.

The proposal was to limit their activities by separating commercial and investment bank functions. The underlying belief of the Glass-Steagall Banking Act of 1933 was that it would reduce risk and create a healthier financial system. Under the Glass-Steagall Act, institutions were given a year to decide whether they would specialize in commercial or investment banking. This Depression-era law was in place for 60 years until Congress and President Bill Clinton repealed it in 1999 under the Gramm-Leach-Bliley Act.

The elimination of the Glass-Steagall Act under the Clinton administration happened after many banks lobbied to remove the restrictions imposed by the act. Supporters of Gramm-Leach-Bliley believed that Glass-Steagall had worked post-Depression and it was time to remove certain restrictions on banks. President Clinton agreed that the act was “no longer appropriate to the economy in which we live. It worked pretty well for the industrial economy … But the world is very different.”

The repeal allowed banking activities to combine with non-banking activities. Glass-Steagall had helped in creating a safety net for commercial banks and allowed the central bank to act as a lender of last resort to commercial banks. But the repeal of Glass-Steagall blurred the distinctive lines between regulated banking functions and shadow banking functions.

During a policy address on January 5, 2016, Sen. Bernie Sanders said, “Shadow banks did gamble recklessly, but where did that money come from? It came from the federally insured bank deposits of big commercial banks – something that would have been banned under the Glass-Steagall Act.” The Glass-Steagall Act has taken center stage in many 2016 presidential debates with Sen. Bernie Sanders and former Maryland Gov. Martin O’Malley supporting the “21st Century Glass-Steagall Act,” an updated version of the 1933 law, which aims to reduce the likelihood of future crises by clearly separating traditional banking activities like savings and checking from riskier, non-banking activities like insurance, swaps dealing, and hedge fund and private equity activities.

Estimating the size of shadow banking is difficult to quantify for the simple reason that many of the entities do not report to any government regulators and therefore remain outside the purview of lawmakers. The growing size of shadow banks remains a threat to the financial system as long as they are unregulated. The matter worsenswith the integration of commercial and investment banking activities as financial holding companies actively facilitate the growth of shadow banks.

In 2016, even with strict regulations under the Dodd-Frank Act, shadow banks remain highly leveraged (promising higher returns but with outsized risk) and wholly unregulated. More control of this unregulated section of the financial system is necessary to achieve accountability and transparency in the banking system. Addressing the issue of shadow banks will not only curb the risk associated with these unregulated banks, but also it will tackle the ongoing problem of financial institutions being “too big to fail.”

We need to create manufacturing jobs in the US, but are anti-trade policies the answer?

Kenneth Rogoff writes:   The rise of anti-trade populism in the 2016 US election campaign portends a dangerous retreat from the United States’ role in world affairs. In the name of reducing US inequality, presidential candidates in both parties would stymie the aspirations of hundreds of millions of desperately poor people in the developing world to join the middle class. If the political appeal of anti-trade policies proves durable, it will mark a historic turning point in global economic affairs, one that bodes ill for the future of American leadership.

Republican presidential candidate Donald Trump has proposed slapping a 45% tax on Chinese imports into the US, a plan that appeals to many Americans who believe that China is getting rich from unfair trade practices. But, for all its extraordinary success in recent decades, China remains a developing country where a significant share of the population live at a level of poverty that would be unimaginable by Western standards.

Consider China’s new five-year plan, which aims to lift 55 million people above the poverty line by 2020.  China’s poverty problem is hardly the world’s worst. India and Africa both have populations roughly comparable to China’s 1.4 billion people, with significantly smaller shares having reached the middle class.

Sanders hammers his opponent Hillary Clinton for her support of earlier trade deals such as the 1992 North America Free Trade Agreement (NAFTA). Yet that agreement forced Mexico to lower its tariffs on US goods far more than it forced the US to reduce its already low tariffs on Mexican goods.

The TPP does have its flaws, particularly in its overshoot on protection of intellectual property rights. But the idea that the deal will be a huge job killer for the US is highly debatable, and something does need to be done to make it easier to sell high-tech goods to the developing world, including China, without fear that such goods will be instantly cloned. A failure to ratify the TPP would almost certainly condemn tens of millions of people in the developing world to continued poverty.

The right remedy to reduce inequality within the US is not to walk away from free trade, but to introduce a better tax system, one that is simpler and more progressive. Ideally, there would be a shift from income taxation to a progressive consumption tax (the simplest example being a flat tax with a very high exemption). The US also desperately needs deep structural reform of its education system, clearing obstacles to introducing technology and competition.

Indeed, new technologies offer the prospect of making it far easier to retrain and retool workers of all ages.

Do pro-deficit progressives realize that the burden of any future debt crises (or financial-repression measures) are likely to fall disproportionately on poor and middle-income citizens, as they have in the past?

Anyone who portrays the US as a huge loser from the global economic status quo needs to gain some perspective on the matter. I have little doubt that a century from now, Americans’ consumption-centric lifestyle will no longer be viewed as something to envy and emulate, and the country’s failure to implement a carbon tax will be viewed as a massive failure. With under 5% of the world’s population, the US accounts for a vastly disproportionate share of carbon-dioxide emissions and other pollution, with much of the blame falling on America’s middle class.

But the idea that trade fuels inequality is a very parochial perspective, and protectionists who shroud themselves in a moralistic inequality narrative are deeply hypocritical. As far as trade is concerned, the current US presidential campaign is an embarrassment of substance, not just of personality.

International Monetary Fund managing director Christine Lagarde offered a hopeful lesson in how to overcome being the only woman in the room, especially in the high-powered male-dominated world of finance and economics, at the Women in the World New York Summit on Thursday.

Interviewed by historian Niall Ferguson, the former French finance minister and top global corporate law executive admitted, as she looked laughingly at a telling photo of herself surrounded by the nearly all-male IMF board, that women still needed “skin as thick as an old crocodile” to get to the top in what is too often a macho world. “I regret to say that the crocodile skin is unfortunately a sine qua non for a period of time,” Lagarde said when asked about what Ferguson termed the current “nasty macho streak in politics” where men were making the most of their masculinity in sometimes embarrassing way.

“But then I very much hope that we can take off the crocodile skin and be normal human beings without having to shield against horrible attacks.” ”

“London is a big financial city, has huge links around Europe and the world, and [Brexit] is one of the risks that we have on the horizon.”

An interconnected world “completely without borders” was a key theme hammered home by the world’s top banker as she spoke of geopolitical risks that have “big economic consequences” — from terrorism to refugees, pandemics and conflicts.”

The IMF used to deal with a world where the Federal Reserve and other central banks had impacts in their countries, but the situation had radically changed over the past year, particularly because of changes in China suddenly having repercussions elsewhere in the world. “The level of risk and the level of interconnectedness is ever so strong … at the same time because of fear, because of uncertainty, because of lack of confidence people are tempted to retire behind their borders and to say: let’s just protect our turf, let’s just be behind our borders, let’s do things at home, and never mind the rest of the world. Well the rest of the world is not at your doorstep it’s with us and we are whether we like it or not massively interconnected.”

The refugee question has personal resonance for Lagarde, especially since the moving experience of visiting the Jordanian Zaatari refugee camp to speak with women whose family members had been killed in the Syrian conflict.

One of the IMF’s missions, alongside the World Bank and other international institutions was therefore to restore stability and help with the economy. “So that once peace has returned — which unfortunately I cannot do much about [as] this is not the mission of the IMF — which is a pre-condition to any economic revival, then clearly it will be our duty together … to actually help it get back on its feet and realize her dream which is to go home touch the ground of Syria and rebuild what spirit she has.”

In further remarks on the pressures bearing down on European leaders and societies amid successive waves of refugees, Lagarde went out of her way praise her friend German Chancellor Angela Merkel for taking the decision last year to welcome more than a million people fleeing conflict and economic hardship. “I want to pay tribute to her because I think … she has taken the moral high ground at that time and she was isolated frankly.”

Recounting a dinner meeting she had with Merkel this week, Lagarde argued there could be hidden benefits to taking the humanitarian decision to allow more refugees to settle in countries like Germany.

The German Chancellor explained to her that the tradition of jealous guarding of information dividing the state and federal governments had been largely broken down since the wave of asylum-seekers from Syria, parts of Africa and South Asia began arriving. “Because of the refugee situation suddenly there is a willingness to actually share information and reconcile databases,” Lagarde said. “And the second benefit is a more united European approach to asylum seekers.”

Leela Jacinto writes: In the weeks since terrorists struck the Belgian capital, authorities and journalists have wasted no time mapping out the links between the Brussels and Paris attacks. Lost in all these lines connecting Europe’s gray urban landscapes are the sun-drenched hills, valleys, and towns of northern Morocco. And it is to Morocco that we must go to fully understand what has spurred young men to wreak havoc in Western European capitals.

At the heart of terrorist strikes across the world over the past 15 years lies the Rif. A mountainous region in northern Morocco, stretching from the teeming cities of Tangier and Tetouan in the west to the Algerian border in the east, the Rif is an impoverished area rich in marijuana plants, hashish peddlers, smugglers, touts, and resistance heroes that has rebelled against colonial administrators, postcolonial kings, and any authority imposed from above. For the children of the Rif who have been transplanted to Europe, this background can combine with marginalization, access to criminal networks, and radicalization to make the vulnerable ones uniquely drawn to acts of terrorism.

Nearly a decade later, the same jihadi tourism trail has led to the Paris and Brussels attacks. One of the latest Riffians to gain international notoriety has been Najim Laachraoui, the Islamic State bomb-maker who traveled to Syria in 2013, where he perfected his explosives expertise.  He’s one of the three men pushing trolleys in Brussels Airport on the morning of March 22. Laachraoui was one of two suicide bombers who blew themselves up at the airport.

Laachraoui was Riffian: a Belgian national predominantly raised in the Schaerbeek neighborhood of Brussels but born in Ajdir, a small Moroccan town with a proud Rif history.

The region’s baggage goes back a long way. The history of the Rif is choked with battles between Berber kingdoms in the precolonial era, which gave way to major wars and rebellions against the Spanish and French.

King Hassan II famously never visited his palaces in Tangier and Tetouan. Government services in the region were negligible, Islamists filled the void, and Wahhabi teachings spread like wild fire in the slums and shanties of cities like Tetouan. Today, the region has the highest rates of poverty, maternal death, and female illiteracy in the country, coupled with Morocco’s lowest growth indices. So, though the current King Mohammed VI has invested in the region and makes it a point to vacation in the Rif, the largesse has not trickled down to ordinary Riffians.

While Europe offered the sorts of economic opportunities for which the first generation of migrants was grateful, the next generation has struggled. The economic downturn since the late 1970s has not helped. The Belgian heavy industries and coal mines that once drew Moroccans from their villages have now shut down, leaving behind areas of urban blight.

But, lurking in the background of all this, there is still the Rif — a radicalizing factor all its own.

The baggage of neglect has affected even the relatively lucky Riffians who escaped poverty back home for Europe. The older generation arrived in then-French-controlled Algeria, Belgium, or mainland France only to find that, as residents of a former Spanish enclave, their French was not up to snuff. Neither, as Berbers speaking Amazigh languages and dialects, was their Arabic.

Under these circumstances, the old Riffian ways and mores of traditional codes of conduct, honor, justice, and suspicion of authorities were transplanted to Brussels neighborhoods and allowed to bloom and grow. Fairly or not, Belgian authorities describe the country’s Rif community as marked by lawlessness and a “tribal, more aggressive culture” that sets it apart from other immigrant communities.

These are the sorts of networks that the predominantly white Belgian and French security services now must crack and infiltrate.

This battle must be won on the streets, from Molenbeek to Tetouan.

Jon Lee Anderson writes:  Panama has always been a country friendly to business.  Banking havens like Panama’s also exist in the Caribbean quasi-nation of Grand Cayman; on the island of Jersey and the Isle of Man; in the Pyrenean sub-nation of Andorra; and in several other aeries around the world. Perhaps the most famous, and possibly most lucrative, offshore bank of all is the nation of Switzerland.

Using the gleaming office tower as a case in point, bricks and mortar are a clever way to hide one’s money, and Panama has long made itself available to real-estate developers who cater to this booming economy. So successful has this resource been for Panama that, seventeen years later, the low-level neighborhood around the tower has wholly disappeared, replaced by scores of newer towers of every hue and description; one, almost lost amid the welter of steel and glass, is shaped fancifully to resemble a corkscrew. The last President of Panama, Ricardo Martinelli, who ran the country from 2009 to 2014, and who is now living in Miami, accused of corruption by Panama’s Supreme Court, was a great believer in public-infrastructure projects, building highways, ocean causeways, and a subway system that will cost billions of dollars. The firm that Martinelli favored with the bulk of these costly projects, the Brazilian engineering giant Odebrecht, is currently caught up in a sweeping corruption scandal at home.

Prominent foreign fugitives have resided in Panama, among them Jorge Serrano Elías, the former President of Guatemala. Serrano had skipped his home country for Panama after being overthrown in 1993. He had been formally accused in Guatemala of stealing tens of millions of dollars in public funds, but had been given a warm welcome in Panama, where he built a luxury housing estate and polo club.

One mayor of Panama City, Juan Carlos Navarro, a Harvard-educated man with Presidential ambitions, has said: “I’ve always thought of Panama as sort of like Switzerland.”  Panama offers a service provided by Panama to the international community. “The world can think of Panama as a refuge of last resort. . . . And if they want to live here quietly,bienvenidos.’”

A massive leak of documents from a Panamanian law firm has provided an unprecedented insight into the use of offshore financial centers by the rich and powerful, which could have reverberations from Russia to Iceland to Fifa.

More than 11m documents were leaked from Mossack Fonseca, a law firm which specialises in setting up offshore companies in tax havens. They include emails, bank records and client information dating back several decades.

The documents were passed to Süddeutsche Zeitung, the German newspaper, and shared with the International Consortium of Investigative Journalists. The year-long investigation involved more than 100 news organisations.

According to the ICIJ, the documents demonstrate that as much as $2bn has been shuffled through banks and offshore companies said to be linked to associates and friends of Vladimir Putin, the Russian president.

As a result of the investigation, Sigmundur Davið Gunnlaugsson, Iceland’s prime minister, is facing allegations that he used an offshore vehicle to hide millions of dollars of investments in the country’s banks.

The documents also appear to show that Juan Pedro Damiani, a Uruguayan lawyer and member of the ethics committee at Fifa, provided assistance to offshore companies reportedly linked to a former Fifa executive arrested in the corruption investigation at the football governing body.

Yuri Kovalchuk, Bank Rossiya’s chairman and another close friend of Mr Putin, financed the construction of the Igora ski resort near their home town of Leningrad, according to the files. The exclusive resort was the site where Mr Putin’s younger daughter Ekaterina married Kirill Shamalov, the son of another close friend of Mr Putin’s, amid great secrecy in 2013, according to Reuters.

Mr Roldugin also holds a minority stake in Kamaz, a Russian car manufacturer, according to the files, as well as Video International, an advertising giant founded by Mikhail Lesin, a longstanding associate of Mr Putin who died in mysterious circumstances in Washington last year.

None of the Mossack Fonseca files mention Mr Putin by name, or implicate him or his associates in any financial wrongdoing.

Iceland has been convulsed for the past week by escalating claims that have put immense pressure on its centre-right prime minister.

After denigrating the creditors of Iceland’s failed banks as vultures, Mr Gunnlaugsson has been on the defensive over reports that his own wife was among the creditors. The pressure mounted as Mr Gunnlaugsson was forced to admit in recent days that he used to own 50 per cent of Wintris, the offshore company which owns the holdings.

Other ministers — including Bjarni Benediktsson, the finance minister who leads the junior party in the coalition government — have admitted to ownership of offshore companies. This is potentially damaging on the Nordic island which is still dealing with the aftermath of its banks imploding during the financial crisis.

Icelandic opposition parties are likely to push for early elections over the revelations, not least because the anti-establishment Pirate party leads the polls with more support than both government parties combined.

Ramón Fonseca Mora, one of the partners of Mossack Fonseca, is a senior adviser to Juan Carlos Varela, Panama’s president. On March 11, he took leave of absence “to defend my honour and my firm”. He denied any wrongdoing in an interview with La Estrella de Panamá, a local daily.

Panama has long been perceived by many as a safe haven for questionable financial deals. Ramón Ricardo Arias, a respected lawyer who runs the Panamanian chapter of Transparency International, said: “Panama has made an effort to adopt legislation to avoid illicit use of its financial sector. Now is the time to enforce those laws. While there still is no strict compliance, there will be abuses. It is the moment for Panama to grow up.”

In a statement on Sunday, the president’s office said: “Panama’s government leads a policy of zero tolerance before any aspect of its legal or financial system that is not handled with high levels of transparency”.

In a statement to ICIJ, Mossack Fonseca said: “We have not once in nearly 40 years of operation been charged with criminal wrongdoing. We’re proud of the work we do, notwithstanding recent and wilful attempts by some to mischaracterise it.”

How the Tools of Finance are Used to Effect Political Change

Robert Parry writes:  The U.S. scheme for establishing the authority of the “unity government” centers on using the $85 billion or so in foreign reserves in Libya’s Central Bank to bring other Libyan leaders onboard. But that strategy may test the question of whether the pen – poised over the Central Bank’s check book – is mightier than the sword, since the militias associated with the rival regimes have plenty of weapons.

Besides the carrot of handing out cash to compliant Libyan politicians and fighters, the Obama administration also is waving a stick, threatening to hit recalcitrant Libyans with financial sanctions or labeling them “terrorists” with all the legal and other dangers that such a designation carries.

But can these tactics – bribery and threats – actually unify a deeply divided Libya, especially when some of the powerful factions are Islamist and see their role as more than strictly political, though the Islamist faction in Tripoli is also opposed to the Islamic State?

After the sea landing on Wednesday, the “unity government” began holding official meetings on Thursday, but inside the heavily guard naval base. How the “unity” Prime Minister Fayez Sirraj and six other members of the Presidency Council can extend their authority across Tripoli and then across Libya clearly remained a work in progress, however.

The image of these “unity” officials, representing what’s called the Government of National Accord, holed up with their backs to the sea at a naval base, unable to dispatch their subordinates to take control of government buildings and ministries, recalls how the previous internationally recognized government, the House of Representatives or HOR, met on a cruise ship in Tobruk in the east.

Meanwhile, HOR’s chief rival, the General National Congress, renamed the National Salvation government, insisted on its legitimacy in Tripoli, but its control, too, was limited to several Libyan cities.

On Wednesday, National Salvation leader Khalifa Ghwell called the “unity” officials at the naval base “infiltrators” and demanded their surrender. Representatives of the “unity government” then threatened to deliver its rivals’ names to Interpol and the U.N. for “supporting terrorism.”

On Friday, the European Union imposed asset freezes on Ghwell and the leaders of the rival parliaments in Tripoli and in Tobruk. According to some accounts, the mix of carrots and sticks has achieved some progress for the “unity government” as 10 towns and cities in western Libya indicated their support for the new leadership.

Clinton’s State Department email exchanges revealed that her aides saw the Libyan war as a chance to pronounce a “Clinton doctrine,” bragging about how Clinton’s clever use of “smart power” could get rid of demonized foreign leaders like Gaddafi. Clinton didn’t miss a second chance to take credit on Oct. 20, 2011, after militants captured Gaddafi, sodomized him with a knife and then murdered him.

With Gaddafi and his largely secular regime out of the way, Islamic militants expanded their power over the country. Some were terrorists, just as Gaddafi had warned.

One Islamic terror group attacked the U.S. consulate in Benghazi on Sept. 11, 2012, killing U.S. Ambassador Christopher Stevens and three other American personnel, an incident that Clinton called the worst moment of her four-year tenure as Secretary of State.

The aftermath of the Clinton-instigated “regime change” in Libya also shows how little Clinton and other U.S. officials learned from the Iraq War disaster.

Nouriel Roubini writes:  With most advanced economies experiencing anemic recoveries from the 2008 financial crisis, their central banks have been forced to move from conventional monetary policy – reducing policy rates via open-market purchases of short-term government bonds – to a range of unconventional policies. Although the zero nominal bound on interest rates – previously only a theoretical possibility – had been reached and zero-interest-rate policy (ZIRP) had been implemented, growth remained anemic. So central banks embraced measures that didn’t even exist in their policy toolkit a decade ago. And now they are poised to do so again.

The list of unconventional measures has been extensive.

(1) Quantitative easing (QE), or purchases of long-term government bonds, once short-term rates were already zero.

(2) Credit easing (CE), which took the form of central-bank purchases of private or semi-private assets – such as mortgage- and other asset-backed securities, covered bonds, corporate bonds, real-estate trust funds, and even equities via exchange-traded funds. The aim was to reduce private credit spreads (the difference between yields on private assets and those on government bonds of similar maturity) and to boost, directly and indirectly, the price of other risky assets such as equities and real estate.

(3) “Forward guidance” (FG), the commitment to keep policy rates at zero for longer than economic fundamentals justified, thereby further reducing shorter-term interest rates.

These policies did indeed reduce long- and medium-term interest rates on government securities and mortgage bonds. They also

(1) narrowed credit spreads on private assets  (2) boosted the stock market, (3) weakened the currency, and (4) reduced real interest rates by increasing inflation expectations.

In most advanced economies, growth (and inflation) remained stubbornly low. There was no shortage of reasons for this.  Unconventional monetary policies could prevent severe recessions and outright deflation; but they could not bring about robust growth and 2% inflation.

Structural policies are needed to increase potential growth and keep firms, households, banks, and government from turning into zombies, chronically unable to spend because of too much debt. And fiscal policies were also necessary to support aggregate demand.

Unfortunately, the political economy of most structural reforms – with their front-loaded costs and back-loaded benefits – implies that they occur only slowly. At the same time, fiscal policy has been constrained in some countries by high deficits and debts (which jeopardize market access), and in others (the eurozone, the United Kingdom, and the United States, for example) by a political backlash against further fiscal stimulus, leading to austerity measures that undermine short-term growth.

As a result, unconventional monetary policies – entrenched now for almost a decade – have themselves become conventional. And, in view of persistent lackluster growth and deflation risk in most advanced economies, monetary policymakers will have to continue their lonely fight with a new set of “unconventional unconventional” monetary policies.

The next stage of unconventional unconventional monetary policy could have three components.  (1) Central banks could tax cash to prevent banks from attempting to avoid the negative-rate tax on excess reserves. With banks unable to switch into cash (thereby earning zero rates), (2) central banks could go even more negative with policy rates.  (3) QE could evolve into a “helicopter drop” of money or direct monetary financing by central banks of larger fiscal deficits. Indeed, the recent market buzz has been about the benefits of permanent monetization of public deficits and debt. Moreover, while QE has benefited holders of financial assets by boosting the prices of stocks, bonds, and real estate, it has also fueled rising inequality. A helicopter drop (through tax cuts or transfers financed by newly printed money) would put money directly into the hands of households, boosting consumption.  (4) Credit easing by central banks, or purchases of private assets, could broaden significantly.

If unconventional unconventional monetary policies sound a little crazy, it’s worth remembering that the same was said about “conventional unconventional” policies just a few years ago. And if current conditions in the advanced economies remain entrenched a decade from now, helicopter drops, debt monetization, and taxation of cash may turn out to be the new QE, CE, FG, ZIRP, and NIRP. Desperate times call for desperate measures.