Corona Capital: Goldman, Vroom, Deutsche Bank 9 Jun 2020 Concise views on the pandemic’s corporate and financial fallout: Goldman does too well in Britain; shares in online used-car sales outfit Vroom double on their market debut; and Deutsche Bank gets another shot at redemption in the U.S. market.
Christine Lagarde is having a good crisis 4 Jun 2020 The ECB boss will buy more assets and for longer than initially planned. She is as decisive as her predecessor, Mario Draghi, but luckier. Politicians are splurging to revive economies. Growth will recover faster because fiscal and monetary policies are pulling the same way.
Corona Capital: ZoomInfo IPO, U.S. trade 4 Jun 2020 Concise views on the pandemic’s corporate and financial fallout: ZoomInfo goes public with a big pop despite Covid-19; and America’s goods-trade deficit with Europe will test Washington’s mood.
Corona Capital: Tech diversity, CNN’s middle age 1 Jun 2020 Concise views on the pandemic’s corporate and financial fallout: As big U.S. technology companies’ CEOs speak out about racial inequality, working from home trends could give them a chance to make a real difference; and 24/7 news network CNN feasts on Covid-19 as it turns 40.
Europe’s bond taboo finally broken by pandemic 27 May 2020 Brussels wants to raise 750 bln euros to help EU members recover from Covid-19. Hard-hit Italy and Spain would get the lion’s share, chiefly in grants rather than loans. Though obstacles remain, the health crisis may have helped the EU overcome its aversion to joint deficits.
Franco-German motor nudges EU off virus crash lane 19 May 2020 The pair proposed a 500 bln euro fund to help pandemic-hit states. That recognises the need to share the fiscal burden and rely less on ECB boss Christine Lagarde. But market jubilance is premature. Opposition from northern countries means the plan will probably be watered down.
Review: Eurocrat’s unity dream faces virus reality 15 May 2020 In “Walking the Highwire” former EU Commissioner Olli Rehn reflects on the euro zone crisis and concludes the single currency needs more cooperation. The pandemic is an opportunity to do so. But a familiar reluctance to share financial burdens suggests the vision remains far off.
Free ECB money is little use for battered banks 1 May 2020 President Christine Lagarde launched yet another programme to slash funding costs for lenders. History suggests much of the benefit will flow straight to borrowers, as intended. Loading up on southern European debt would be profitable but risky, and may irk supervisors.
European banks’ bad-debt pain threshold 27 Apr 2020 The continent’s major lenders have bigger capital buffers and are getting help from regulators. However, their balance sheets are expanding and income is dropping, while many borrowers are at risk of default. This calculator shows what level of bad loans banks can safely absorb.
Guest view: Mutual debt is spectre haunting the EU 22 Apr 2020 European leaders meet on Thursday to discuss how to tackle the economic costs of the pandemic. Collective borrowing is the most contentious item on the agenda. Carlo Altomonte of Bocconi University and Fabrizio Pagani of Muzinich explain how a joint “recovery fund” might work.
Spain finds risky fix for $1.6 trln EU virus fund 21 Apr 2020 Prime Minister Pedro Sanchez wants the European Union to issue perpetual debt to fight the Covid-19 crisis. Allocating funds as grants rather than new loans would ease the burden on indebted sovereigns. But using untested taxes may spook bondholders and northern member states.
EU virus aid is no panacea for Italy’s debt woes 17 Apr 2020 The country ravaged by Covid-19 could draw on an EU euro bailout fund to help manage the pandemic. But interest savings look small, unless the ECB also helps. Political resistance to use such funds means Rome probably won’t use the aid until it faces a bond market crisis.
Dixon: Reports of euro’s death greatly exaggerated 14 Apr 2020 Both pro- and anti-Europeans are saying the coronavirus pandemic may tear the European Union to shreds and destroy its single currency. In fact, the bloc is muddling through.
Wobbly EU banking union gets extra Covid-19 shove 8 Apr 2020 Italy is boosting its ‘golden powers’ to shield banks hit by a pandemic-led market rout from unwanted takeovers. Germany and France have said they are ready to inject cash in crisis-hit companies. If such plans materialise, EU’s banking union will be even worse than half-baked.
Breakdown: Europe’s coronabond conundrum 7 Apr 2020 The pandemic is stretching state finances, particularly in heavily indebted countries like Italy. ECB bond-buying helps; so would clubbing together to provide cheap loans. But it’s not enough. It’s time for the single currency to consider joint bonds. Breakingviews explains why.
Orbanomics may be Hungary’s best political shield 6 Apr 2020 Covid-19 has enabled Viktor Orban to rule by decree. Busy with the virus, the EU may fail to stop abuses. But the prime minister's power grab may be limited by Hungary's economic reliance on foreign investment, which gives the like of BMW more scope to register disapproval.
Corona Capital: Uncle Sam’s penchant for boutiques 2 Apr 2020 Concise views on the pandemic’s corporate and financial fallout. The U.S. government has given a boost to independent investment banks by hiring Moelis. Perella Weinberg and PJT are its bailout advisers. Megabanks like JPMorgan and Goldman Sachs, meanwhile, are left on the shelf.
EU divisions risk inflating crisis bill 27 Mar 2020 European leaders failed to agree a joint fiscal response to the pandemic. Despite European Central Bank support, EU inaction makes it harder for Italy and other indebted euro zone nations to ramp up spending to support their stricken economies. That will raise the ultimate cost.
EU can retool old crisis weapons for new fight 24 Mar 2020 The European Stability Mechanism was set up to support troubled euro zone countries. Its 410 bln euros of firepower could help Italy and others with the coronavirus pandemic and unlock more ECB support. By stopping short of common borrowing, it may also be acceptable to Germany.
ECB has a nascent euro zone crisis to head off 18 Mar 2020 The yield spread between German bonds and French or Dutch ones has suddenly widened. That, more than a blowout in the gap with Italy, was the sign in 2012 that markets were questioning the single currency’s future. ECB boss Christine Lagarde has little time to nip it in the bud.