Farewell to a sound Banking Union?
MADRID | By JP Marin Arrese | The agreement reached on a common backstop for ailing banks in the Eurozone comes utterly short of expectations.
Articles by JP Marin Arrese
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JP Marin Arrese
JP Marin Arrese
Is the FED scrapping cheap money?
MADRID|J.P. Martin Arrese|Resorting to cheap money has provided the Federal Reserve a vital support to US faltering economy. The huge stimulus has largely avoided the prospect of a downturn, but there are clear signs that a wealth-led recovery fails to deliver a robust self-propelled growth.
Clamp down on rate-fixing riggers
MADRID | By J.P. Marín Arrese |The European competition watchdog has imposed a record € 1.7 billion fine on six top banking groups for their disreputable behaviour in fixing Euribor and Yen-Libor rates. Deutsche Bank (725 bn), Société Générale (446 bn) and RBS (391 bn) rank as top losers in this shameful hit parade. JPMorgan and Citigroup are also losing their creditworthiness as fair financial players. UBS and Barclays escape unscathed, benefitting from full leniency as their whistleblowing helped to frame culprits. This move follows similar probes in a number of jurisdictions. Up to now, bankers are poised footing a hefty $6bn bill for grossly abusing fair market rules.
Are we heading for deflation?
MADRID | By JP Marin Arrese | Prices like the weather inescapably lead to widespread demurral. They always look either overly hot or unduly cold. Yet the current debate on potential deflation seems largely shrugged off in Spain, even confronted with a CPI dwelling in minus territory. A predictable reaction in a country that scores a solid record of relentless price hikes.
Spanish banking tax ballooning
MADRID | By J.P. Marín Arrese | Spanish banks are frantically pressing government to transform their deferred tax assets (DTA) into rock-solid unconditional commitments. Failure to do so before the end of the year would deprive them of 40 billion in Tier 1 capital, an amount equivalent to last year’s rescue package. Unless they secure full immunity for current DTA, they are bound to devote ample resources in redressing their own resources.
A nasty surprise for Spanish banks
MADRID | By J.P. Marín Arrese | As credit institutions gathered in Frankfurt to meet top ECB officials for a first-hand appraisal of the forthcoming common supervision, the Spanish banks proved utterly misinformed. They had taken for granted that domestic sovereign bonds held in their balance sheets could be accounted at their nominal value. Yet Draghi failed to provide any assurance to that effect, hinting the issue being subject to review next year.
Brussels budget scrutiny in the Eurozone
MADRID | By JP Marin Arrese | The European Commission has undertaken a thorough review of national budgets following the sweeping powers conferred to it to ensure consistency across the Eurozone. When enacted, this move was heralded as breaking into new territory. Yet the opinions now delivered flatly fail to meet its ambitious goal.
EU recovery loses steam
MADRID | By JP Marin Arrese | One day after the European Commission put Germany under close scrutiny, blaming its fat trade surplus of curtailing other countries’ growth, figures released on economic performance in the third quarter came as a nasty surprise. Exports had stalled in the biggest partner, bringing growth rate to 0.3% down from 0.7% three months before. Resilience in internal demand had saved it from shrinking, openly contradicting Brussels’ claims against Berlin.
Draghi is bound to anger the Germans
MADRID | By JP Marin Arrese | Draghi is becoming a popular target for the German press. He presented himself as a tough defender of the established order in monetary policy when canvassing for the top job in the European central bank. But as soon as he secured his coveted goal, he shifted away from orthodoxy.
EU stress tests: Draghi gets nervous
MADRID | By JP Marin Arrese | Draghi’s acid comment that a number of banks had to fail the forthcoming ECB asset quality and stress tests to ensure their credibility, sounded like a warning on his resoluteness to undertake an unsparing check before taking over full supervisory powers. His scaremongering statement has being judged as wholly inappropriate for a central banker. A position he is well acquainted with.