EUROPE
German Central Bank head Jens Weidmann has developed a reputation in Europe for saying no to
everything. He is skeptical of efforts to save the euro and isn't shy about
saying so. But is he right?
Corporation Carte
Blanche: Will US-EU Trade Become Too Free? – Spiegel
Opposition to the planned new trans-Atlantic free trade agreement is
growing. So far, criticism has focused on the fact that the deal seems directed
exclusively at economic interests. Now fears are growing that corporations will
be given too much power.
Romance and Reform:
Does Hollande Mean Business This Time? – Spiegel
German politicians are letting out a sigh of relief over French President
François Hollande's apparent about face on economic reforms. With his private
life under scrutiny, is he strong enough to push through needed changes?
Draghi Sees Progress
in Euro Zone, but Puts Banks on Notice
Some banks in the euro
zone could go out of business as a result of intense official scrutiny they
will face this year, Mario Draghi, the president of the European Central Bank,
said Friday as he presented a generally upbeat view of the European economy.
Cross-Currency Swap
Premium Rises Seventh Day as Banks Pull Back – BB
The premium that European lenders pay to obtain dollar-denominated cash
flows increased for a seventh day as global central banks said they’ll wind
down emergency funding programs.
The cost of insuring
corporate bonds against losses in Europe is heading for the biggest weekly rise
in seven months on concern a slowdown in emerging-market economies will curb
global growth.
The Spanish economy: On
the mend – The
Economist
The BoE’s “first
phase” of forward guidance – Money
supply / FT
ASIA
The market wants policy makers to allow the first onshore bond default
to reduce long-term hazards to the financial system.
Currencies and banks:
the two big questions about China – The
A-list / FT
Will the renminbi soon rival the dollar as a global reserve currency? Is
the rapid growth of shadow banking an accident waiting to happen?
Japan government
forecasts show Abe missing budget-balance promise – Reuters
Japanese government calculations indicate that Prime Minister Shinzo Abe
cannot meet his budget-balancing promise in coming years on the current course,
suggesting he may come under greater pressure from fiscal hawks for future tax
increases.
EMERGING
Latam stocks at
4-year low in emerging markets selloff – Reuters
Emerging markets stocks and currencies, and to a lesser extent bonds,
have been pummeled in recent sessions as investors fret over issues including
slower growth in China and a decline in U.S. monetary
stimulus.
Contagion
Spreads in Emerging Markets as Crises Grow – BB
The worst selloff in emerging-market currencies in five years is
beginning to reveal the extent of the fallout from the Federal Reserve’s
tapering of monetary stimulus, compounded by political and financial
instability.
Davos 2014: what EM
private equity investors are thinking – beyondbrics
/ FT
Emerging market
policymakers move to allay currency concerns – Reuters
OTHER
Banks Don't Lend Out
Reserves – Frances
Coppola / Forbes
Market Outlook 2014 – Mebane Farmer
Global Liquidity
through the Lens of Monetary Aggregates – IMF
Mapping the Shadow
Banking System Through a Global Flow of Funds Analysis – IMF
Exchange Rate Management
and Crisis Susceptibility: A Reassessment – IMF
Macroeconomic and financial vulnerabilities are significantly greater
under less flexible intermediate regimes—including hard pegs—as compared to
floats. While not especially susceptible to banking or currency crises, hard
pegs are significantly more prone to growth collapses, suggesting that the
security of the hard end of the prescription is largely illusory.
As the World Economic
Forum concludes in Davos, Switzerland, we’re looking back at some of our past
coverage of the elite gathering.
New Old Keynesianism – Crooked Timber