Michael Wolgemuth, board member at Germany’s Konrad Adenauer Foundation thinks it will take time for there to be reconciliation eventually between creditors and debtors in the euro area. The key is to know and regulate what both parties need to take into account in the event of a state becoming insolvent.
The European Banking Authority (EBA) rectified the solvency figures for the Spanish banking sector. The regulatory authority has raised the average “fully-loaded” capital ratio at end-June to 10% from a previous 9%. This compares with the European sector average of 11.8%
James Alexander via Historinhas | In no other country in the euro zone is the public so intensely engaged with each monetary policy measures of the ECB as passionately as in Germany. This applies to the Bavarian public, which is particularly known for distinct opinions and clear announcements.
The markets are seemingly focusing on next week ECB’s meeting rather than on geopolitical events. Investors expect they will take new measures on expansionary monetary policy. Yesterday, ECB’s vice president Vitor Constancio, insisted again that the central bank will analyse those if needed to reach the inflation target of 2%.
James Alexander via Historinhas | You have to feel for ECB President Draghi sometimes. He’s trying to steer a huge and dysfunctional ship. His heart is in the right place, but he has far too much faith in the interest rate and credit channel “instruments” for the management of monetary policy. They have prevented further recessions and do seem to have the Euro area on the right track, but it is painfully slow and risky .
Household debt another reason to prefer SEK shorts In September we argued that the krona should weaken due to strong and persistent disinflationary pressures imported from abroad. Another factor that probably does not get the attention it deserves is the leverage of Swedis households. In the medium to long term, we think this will keep the krona under pressure. The Riksbank will have to tread carefully, even in a strong…
Alberto Forchielli via Caixin| The system in place in Europe after Napoleon’s downfall created a common purpose, something that is sorely lacking in today’s world
The market has already discounted that the ECB will announce new stimulus measures on December 3rd, modifying the current debt purchasing programme. But monetary policy only goes so far, and apart from the central bank’s measures, the Eurozone needs more public and private investment to recover its growth potential.
Barclays | Both ECB’s Vice President Constancio and Chief Economist Praet warned of a potential macroeconomic impact of Paris terrorist attacks last Friday although the noted that these types of events generally have a transitory effect on the economy.