european central bank

Central banks in a position of wait-and-see

La Caixa research team, in Barcelona | The role played recently by central banks in the current scenario is being decisive. Since 2008, they have demonstrated an extraordinary capacity to take decisions and act in response to the financial shocks occurring. Thanks to this sustained commitment they are achieving, at least in part, their desired goals of relaxing tension in the capital markets and boosting economic activity. As is usual, the…


Jeffrey Sachs defends European model

NEW YORK | The debate between austerity or growth to cure Europes illness is in full swing. Austerians are, though, losing support. A consensus is growing that current cuts alone aren’t likely to tackle the euro zone crisis. For US celebrity economist and director of the Earth Institute Jeffrey Sachs, “Fiscal policy alone won’t save Europe,” he said in the launch of the Center on Global Economic Governance at Columbia…

bad bank

“For Spain is either a bad bank or an outright intervention”

By Tania Suárez, in Madrid | Gabriel Montalto is general manager in Spain at Hanseatic Brokerhouse. In a conversation with The Corner, he pointed out that the European Central Bank should finish with the liquidity injections as soon as possible. Montalto also remarked that is doubtful that Germany decides to change its policy of austerity. Do you think the euro zone is already in recession? According to the data we are…

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“Long-term investors should enter Ibex’ big names, dividends are very attractive”

By Tania Suárez, in Madrid | Fernando Luque is editor and analyst at Morningstar. In a conversation with The Corner, Luque remarked that it is difficult to know whether the Spanish Ibex has already reached bottom, and added that long-term investments at current market prices seem more interesting. Wolfang Münchau wrote in the pages of the Financial Times that if Spain can’t reach the deficit target, it will be bad and if it…


“Time for a true euro zone bond,” BNY Mellon Investment advises Brussels

LONDON |The European economies are likely to continue being a significant source of volatility as disagreement within the European Central Bank inhibits its ability to put the region on a firmer footing, Standish said in a report published Thursday. The fixed income specialist for BNY Mellon made the observations in its April Outlook, by the global macro strategists at the firm. The conflicting viewpoints of members of the ECB’s governing council…

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European Commissioner Viviane Reding: “We’ll fight for our social welfare state”

She is the most experienced member of the European Commission and it shows. In her third term at the European institution, Viviane Reding does not shy away from discussing almost any subject, not even the poor economic situation of Spain, which she addressed in detail during an exclusive interview with Cinco Días. Reding is travelling on Thursday to Madrid, to meet with several members The official thesis in Brussels finds…


The euro zone’s gross debt to fall in 2013

By Carlos Díaz Guell, in Madrid | The crisis has led to a rapid accumulation of public debt as a result of the deterioration in economic growth, the functioning of automatic stabilisers, fiscal incentives and public capital support for the banking sector. In the euro zone, the European Central Bank estimates that the ratio of public debt as a percentage of GDP has risen 22 points since 2007 so it reached…


The days Spanish bonds lived dangerously

NEW YORK | As the European Central Bank signaled it may resume asset purchases if needed to stem the crisis, the yield on Spanish 10-year bonds slid to 5.82%. Notwithstanding the last few days Spanish bonds went under the unwanted spotlight: yields on the 10 years bonds rose to nearly 6% on Tuesday, the highest since January. In less than two months, Spain’s interest rate has risen about one point….

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The European Central Bank is dead

By Luis Arroyo, in Madrid | The ECB has lost all his monetary gunpowder, as this has become fragmented. In this graph I saw recently on the Greek money supply, monetary aggregates M1 M2 and M3 have collapsed. Deposits are falling, like savings accounts and time deposits. However, the monetary base or the money issued by the ECB is the same for everyone. What happens is that in normal countries the banking sector does not experience problems to expand its assets (loans), what results in an increase in deposits. The multiplier effect works. But what happens…

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US financial press put Spain under the spotlight

NEW YORK | It’s been a bad day for Spain in Wall Street’s most read media. The tepid bond auction is to blame: Spain sold a total of $3.43 billion in bonds with maturities between 2015 and 2020, near the bottom of its target volume. Spain expected to sell between $3,28 billion and a planned maximum of $4,6 billion. There was a weaker demand and therefore it had to pay…