Negative interest rates don’t just require an intellectual effort. They also have real consequences. So far the banks have already paid 2.8 billion euros to the European Central Bank (ECB) as a penalty for excess liquidity, BS Markets says.
J. L. M.Campuzano (Spanish Banking Association) | During one of the conferences at last week’s Jackson Hole meeting, ECB council member Benoit Coeure analysed the extreme monetary measures taken by the ECB (in reality by all the main central banks) during the crisis. His opinion was that the neutral interest rate equilibrium is now very low (the product of a combination of low potential growth and low inflation expectations) which explains the remainder of the exceptional measures implemented.
Alfonso de Gregorio (Gesconsult) | Europac is a company which is involved in all sectors related to the paper and packaging industry. It’s a highly cyclical company trading at a 10% discount versus the average for the sector, both in terms of PER and EV/EBITDA.
J. L. M.Campuzano (Spanish Banking Association) | Fed deputy chairman Fisher said last Tuesday that any future decision on interest rates will depend, in the end, on the data. The market is now awaiting the US August jobs figures, due out tomorrow. This will be the key indicator anticipating a September rate hike. They say that more than 150,000 new jobs will be a sufficient trigger for the Fed to take its decision this month. And the necessary condition? That the rest
Peter Drysdale via Caixin | China has a lead role to play at the Hangzhou G20 meetings on opening up global trade, investment, deeper financial reform
BBVA Research | After providing a grand finale to the Rio 2016 Olympic Games, the first ever to be held in Latin America, Brazil is now back to reality: a political crisis which is the prelude to the definitive removal from office of President Dilma Rousseff and an economic crisis which has pushed the country into recession.
As a result of the global financial crisis, funding conditions for SMEs in the peripheral European countries tightened considerably. But following the implementation of expansionary monetary policies, including TLTROs and negative interest rates, has loan activity improved for small businesses in countries like Spain, where they are key drivers for economic growth and job creation.
Spain’s caretaker Prime Minister Mariano Rajoy will this afternoon make his investiture speech to parliament, ahead of a key vote on Wednesday to secure support for his conservative Popular Party to form a new government. The PP have already brokered an agreement for breaking the current political deadlock with centre-right party Ciudadanos, led by Catalonian lawyer Alber Rivera. As a result, Rajoy can probably rely on the support of 170 MPs. But he needs 176 votes (out of a total of 350) if the PP is to win an absolute majority.
Recent surveys in both Germany and France indicate the perception on the part of companies that there will not be the necessary stimuli for economic activity to fuel an acceleration in the economic momentum.
The reality being faced in the US and abroad is that the current world order has failed to deliver its promises.