LONDON | Behind the option of recovering the public investment made in Lloyds TSB, a possibility sounded today by Whitehall amid better priced bank stocks, there is the European Central Bank. But British taxpayers will probably never know.
Why should banks enjoy the comfort of placing money in the Frankfurt-based central bank for risk-free profit? They should instead letting it flow. After all, businesses are starved of cash to hire and invest.
In the current environment of huge indebtedness and low inflation, with sizeable unspent resources, a strong euro adds insult to injury.
Uncertainty is driven by a scenario with lower growth rates for GDP, trade, capital formation and employment, and by a number of perceived risk factors related to the Eurozone crisis, and the United States fiscal cliff.
By Steen Jakobsen, chief economist at Saxo Bank | “The greatest danger, unless something is done, is that social tensions scale and political radicalism grows in Europe, with unemployment pushing young people against the institutions and the private sector telling the public sector that enough is enough.”
Deficit per GDP reduction in cold blood increases the debt per GDP ratio. We have been there, already. The sensible thing to do is to finance economic growth to shorten the deficit, even if it prolongs for a certain period the increase of debt.
Inflation in the euro area falls by 0.1 percentage points to 2.5% year-on-year. CaixaBank analysts predict a downward slide in inflation over the coming months.
In the euro zone, cash in circulation, and short-term and long-term bank deposits, money market funds grew at a year on year rate of 4 percent in October.
BARCELONA | CaixaBank | The adjustment in employment during the crisis has been more intense in those countries with a real estate bubble. Leading indicators point to further job losses.
Institutional investors may be getting their hands in higher-yield sovereign bonds to increase their results, but there are some financial reports of improving macroeconomics for the euro zone.