The recent rescue of two ailing Italian banks -Popolare di Vicenza and Veneto Banca-broke away from the standard bail-in procedures introduced by the EU. The trick used for implementing that circumvention was based on the official guarantee that the two lame ducks did not represent a systemic danger.
The main shortcoming of the Bank of Spain’s report on the Spanish banking crisis lies in its lack of a convincing analysis of the reasons why banks proved so vulnerable. It identifies their excessive exposure to residential mortgages, as well as their heavy reliance on external financing. But it fails to plainly set out what went wrong with the world’s financial sector.
Little did observers expect Fed Chair Janet Yellen’s energetic and upbeat account of economic prospects ahead. They discovered, much to their surprise, that underperforming inflation data was brushed aside as she shifted to forecasts tailored to match with the rate stiffening.
Time has come to reassess the ECB’s strategy. The Central Bank can no longer overlook the economy’s marked improvement. Nor can it ignore the fact that the money market price is at lower levels than warranted by the current environment. It should act swiftly.
When Ms. May called for General UK Elections, she was fully confident of a landslide victory. Jeremy Corbyn seemed no match for her. But successive blunders and a rather clumsy campaign have led to an unforeseen revival on the part of the Labour party. But the best result for the UK and Europe would be either a landslide victory for Ms. May or an unexpected Labour win.
Trump’s rejection of the Paris climate agreement will have few substantial consequences as regards promoting home-made pollution. On the other hand, it may deter emerging economies, such as India, from delivering on their commitments in exchange for money, unless Europe foots the bill.
Emmanuel Macron’s success in the presidential elections has alleviated fears France might fall into the black pit of extremism. But he faces the huge task of delivering growth by sweeping reforms while preserving most of the current social model. A task that will prove elusive unless he secures solid parliamentary backing.
European capitals have welcomed with relief Macron’s victory in the first round of the French elections. But even if Macron’s lead in the first round seems comfortable enough, support for extremist parties represents more than half of total votes. This could lead to unstability in the country which Macron will need to be able to control.
The European bail-out of our banking system saved its skin. Now, a decade later, parliament and the Bank of Spain are investigating what happened.
Trump’s attempt to get rid of the Obamacare health scheme has turned into a complete fiasco, and a similar fate might await his plans to revamp public expenditure. Trump’s own party mates share his will to reduce corporation tax, but have expressed deep concern about huge deficits. So much of the presidential agenda might end up in the dustbin.