Europe’s fuzzy capital markets union takes shape 4 Sep 2015 The European Commission is mulling a directive to harmonise member states’ various insolvency regimes. If common principles can be nailed down, bankruptcy will get smoother. And the Juncker commission’s goal of better integrated capital markets would have a hope of success.
IMF misses chance to help global policymakers 3 Sep 2015 The lender’s warning on global economic risks lacks what policymakers need: insight into what’s happening to China and why market ructions have been so severe. G20 finance officials heading for Turkey need meatier, more challenging views than the IMF seems prepared to give.
Poland makes bank investors political playthings 1 Sep 2015 Warsaw could force lenders to cough up $5.9 bln to relieve borrowers with Swiss franc mortgages not obviously in distress. With elections looming, the party ahead in the polls wants to tax banks’ balance sheets. It may be pure politics, but the danger is that foreign money flees.
Hugo Dixon: Greek election may reopen can of worms 31 Aug 2015 Given that no party is likely to emerge from next month’s vote with a majority, it may be hard to form a strong government that can implement the country’s new bailout deal. There’s even a risk that there will be yet more elections. That could tip Greece back into crisis.
Bondholders escape Ukraine with only mild scratch 27 Aug 2015 War-torn Ukraine has agreed a 20 percent haircut with a group of rebellious creditors. That’s half the loss Kiev originally wanted. Yet it’s not much of a victory for lenders either: with the economy in tatters and doubts continuing, creditors will be lucky to escape another hit.
Markets are a test of central bankers’ backbone 27 Aug 2015 Equities are rallying after a Fed official cast doubt on the need for a September rate rise. China’s slowdown and sliding commodities may warrant circumspection among global central bankers. But market gyrations don’t. Monetary policy inaction should be for the right reasons.
China’s sensible rate cut sends dangerous signals 25 Aug 2015 The central bank has lowered interest rates by a quarter point and reduced the amount lenders must hold in reserve. It helps ease the slowdown and offsets capital outflows. But by responding to two days of stock market turmoil, policymakers run the risk of stoking moral hazard.
Markets fear central bankers are only human 20 Aug 2015 Unexpected events like China’s devaluation and commodity price drops are having a surprisingly big effect on long-range market inflation expectations. Previously, investors tended to look past such phenomena. But trust in policymakers’ ability to offset shocks is at a low ebb.
Rebellious Germans ignore Greek silver lining 19 Aug 2015 German Chancellor Angela Merkel is facing a revolt from her own party over the Greek bailout. The fear that Greece is a bottomless pit is fair. But it’s not all lost money: nearly a third of the 86 bln euro loaned will repay debt to public creditors, including Germany.
Hugo Dixon: Greece may not need debt haircut 17 Aug 2015 No single measure, such as debt to GDP, adequately captures how unsustainable Athens’ balance sheet is. Most other yardsticks show Greece needs debt relief. But cutting the face value of its borrowings is probably not required.
Ditching Dilma would bring Brazil new problems 14 Aug 2015 Many Brazilians want to impeach President Rousseff, unpopular due to an ailing economy and corruption scandals. But any bid by lawmakers to oust her would raise political uncertainty, discouraging investors. Finding a way to get along would be a smarter option.
Skills deficit may hamper UK jobs growth 12 Aug 2015 Britain’s labour market seems to be doing pretty well. Unemployment has fallen and wages are rising at a decent clip. But scratch the surface and there’s a nascent issue. New data shows a large number of vacancies, especially in sectors that require more technical proficiency.
Greece deal leaves euro intact but fragile 11 Aug 2015 Athens may get its bailout after Prime Minister Alexis Tsipras gave in to reform demands. Quitting the euro is much less likely. It suggests currency union can bear the near-exit of a peripheral state. Economic rifts between core members, though, remain the big future risk.
China currency move reflects realism over idealism 11 Aug 2015 A surprise 1.9 percent devaluation of the yuan won’t have much effect on the real economy, but may show willingness to help exports through a cheaper currency. To unwind global imbalances, the yuan really needs to be stronger. China just isn’t yet ready to take that medicine.
BoE manages to be transparent yet unpredictable 6 Aug 2015 The UK central bank has for the first time simultaneously released its policy decision, how rate-setters voted, and its inflation report. It’s transparent. But investor shock that only one person voted to hike rates suggests greater openness doesn’t mean greater predictability.
Euro zone economic bright spots conceal a malaise 30 Jul 2015 The region’s recovery continues, with extra sunshine in Spain. However, inflation remains disturbingly weak, and monetary union is failing at its most basic task, economic convergence. A new ECB study shows that differences between members’ real GDP per person have grown.
Clinton half-hearted on helping labor over capital 29 Jul 2015 The would-be U.S. president wants to tackle inequality. Proposals to tweak capital gains taxes, for example, are part of that. Things like raising minimum wages or abolishing the interest deduction might do more. Clinton’s problem is she can’t afford to knock business too hard.
New York commuter crisis may be good for America 28 Jul 2015 Major delays on some of the busiest rail lines into Manhattan from New Jersey have incited outrage. The overhead wires being blamed are emblematic of the decrepit infrastructure across the country. After so much partisan bickering, this episode could focus minds on funding.
Hugo Dixon: The optimist’s guide to Greece 27 Jul 2015 There are so many ways things could go wrong in Greece that it’s easy to miss how things could also go right. The good scenario involves the ECB buying up Greek bonds, the lifting of capital controls and a deal on debt relief – all by year-end.
No room for complacency on Spanish jobs 24 Jul 2015 Spain is creating a near-record number of sorely needed jobs. This is great news. But the unemployment rate is still 22.4 percent and nearly half the jobless are long term. There’s still a long way to go. The labour market remains stubbornly split between insiders and outsiders.