Articles by The Corner

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.
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Santander bank to appoint new chairman today after Emilio Botin’s death

MADRID | The Corner | Spanish banking landmark Emilio Botin died on Wednesday at 79 of heart attack, but the country’s main lender won’t be without a captain for long: a special board meeting will be hold on Wednesday to designate a new chairman, the bank said in a statement. Scion of a wealthy banking dynasty, Mr Botín was the head of Spanish banking internationalization. Shares in Santander dropped 1.7 percent to 7.6 euros at 0710 GMT after the announcement.


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G4 central banks expanded their balance sheets by $4Tr in 4 years

MADRID | The Corner | The size of the ECB’s private asset purchase plan is an enigma. According Mr Draghi, the central lender aims to bring its balance sheet to 2012 levels, that is,  from the current €2Tr to €3Tr (March 2012). Some analysts believe he went too far in Jackson Hole and the expansion shall not exceed €450bn (see chart above). Meanwhile, the G4 central lenders have increased their balance sheets in $4Tr since 2010- Only the BoJ continues to expand it at a rate of $650bn/year. And even if the Fed starts unwinding its stimulus program in October, if we add about €450bn annual from the ECB would liquidity would be increased by €1Tr.



spain gdp growth

OECD to Spain: Reform your reforms

MADRID | The Corner | Monetary policy is practically exhausted, there is almost no room for fiscal manoeuver due to the excess of indebtment… the only possible move for Spain now is “reforming the reform,” as Barclays’ Alberto Vigil commented on Tuesday. The Paris-based think-tank, who as usual warned about the huge unemployment rate and the deflation risk on Monday, recommended increasing consumer, property, and green taxes, and reducing employer contributions to social security for less-skilled workers.


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How many NPLs in the Greek banking sector are also non-recoverable loans?

ATHENS | By Jens Bastian via MacroPolis | The recent presentation of half-year results by the four systemic banks in Greece – National Bank of Greece (NBG), Piraeus Bank, Alpha Bank and Eurobank – brought a mixture of good news and underlying structural challenges affecting the operational capacity of domestic lenders.


No Picture

Will we see a second round of QE in Europe soon?

MADRID | The Corner | “The ECB’s quantitative easing in Europe came late compared to the US Fed’s but before we expected,” Barclays’ Alberto Vigil commented on Monday, who believes that a second round of QE stimulus in the eurozone is about to take place soon. “Little bears may become a little like bulls,” he ironizes.  The combination of the QE with the strength of the American data has already brought a significant correction of the euro of 7%.

 

 


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Scotland referendum: ‘Yes’ victory would hurt UK risk premium

MADRID | The Corner | The pound fell around 1% against the euro on Monday and the dollar after the results of the first serious poll giving the victory to “yes” in the referendum on separation for Scotland. According to the latest YouGov poll published  a day before, the support of Scottish independents would reach 51% vs 49% who are against if the undecided are excluded. UBS economist Paul Donovan commented about the risk of a narrow result in the polls in favor of remaining in the UK, similar to what happened in Quebec in 1995.


No Picture

Peripheral bonds at minimums will make financing costs plummet

MADRID | The Corner | The last ECB measures will apease investors who see that once again central banks are betting on the economy although this means forcing their mandates. And they had an immediate effect on the EU’s peripheral bonds: Spanish 10-year-bond yield closed at 2.05% and 5-year-bond at 0.72%, while risk premiums fell to multi-year lows. This will serve to drastically reduce the cost of financing and making it much easier for large companies to  get funding. The euro’s strong devaluation against major world currencies should serve to increase the competitiveness of European producers and increase the region’s exports, analysts at Link commented on Monday.


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Predictions pleasant and unpleasant for the world a century from now

MASSACHUSETTS | By Richard N. Cooper via Caixin | John Maynard Keynes gave an address in Madrid in 1930 called on the Economic Possibilities of Our Grandchildren and set a century in the future. The year 2030 is still 16 years away, but the world is almost there. Anticipating its arrival, a Spanish economist asked 10 prominent economists, among them three winners of the Nobel prize, to reflect on what the next century might bring in the way of economic and other developments, recently published as In 100 Years.