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Sunday, July 6

6th Jul - W/E: Best of the Week

Here are the ”best” from my posts of the ending week. Last week’s edition here.

Last week:
Juncker named the next president of the EU Commission.
Italy’s Renzi demands breaking fiscal pacts
BIS warned of a bubble similar to 2007
US June employment report stronger than expected
ECB moves to less frequent meetings, begins to publish minutes
Sweden’s central bank surprised with a large cut, disagreement
BNP Paribas was made an example
BoE is scared of housing bubble

Previously on MoreLiver’s:

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Only 8% of banks says they will need to raise capital after AQRBruegel
Ernst and Young has published this week their European Banking Barometer for the first half of 2014, which gives a very interesting snapshot of the banking sector’s perceptions about macroeconomic outlook as well as an indication of their priorities for the next moths. Among other issues, it also includes interesting insights on banks perception of the capital needs that will result from the ECB’s assessment. Findings confirm that uncertainty still prevails.

Europe has wasted a good crisisBruegel
In a crisis, when Europe stumbles, it gets up to move forward. Not this time.

Euro Debt Constraining GrowthFT
Ralph Atkins, the FT’s capital markets editor, discusses high private sector debt levels in the eurozone with Moritz Kraemer, S&P’s chief sovereign ratings officer. Mr Kramer says Europe is ‘in for the long haul’ on debt deleveraging.

Deflating euro zone inflation expectationsReuters
With signs the fragile euro zone recovery may already be faltering, the threat of deflation remains real. The danger of course, as the Bank of Japan knows well, is that when deflation sets in, it does so very gently. But once it does, it can take a generation to escape.

Germany and the future of the
German dominance has allowed the euro to achieve a number of design objectives, and this may continue if Germany does not shirk its responsibilities. Germany’s resilience and dominant size within the EU may explain its ‘muddling through’ approach to the Eurozone crisis. Greater mobility of labour and lower mobility of under-regulated capital may be the costly ‘second best’ adjustment until the arrival of more mature Eurozone institutions.

Assessing the EU Council Record: Cameron and Juncker May Work Well TogetherPIIE
The election of Jean-Claude Juncker as the next president of the European Commission was not the only accomplishment of EU leaders in late June.

U.K. Housing Is Economy’s Biggest Threat, BOE SaysBB
BOE’s Cunliffe: Monetary Policy Last Line of Defense on Financial StabilityWSJ

Repo rate cut by half a percentage point to 0.25 per centRiksbank
Riksbank Targets Deflation With Bigger-Than-Estimated CutBB

Payrolls Jumped as U.S. Jobless Rate Fell to 6.1% in JuneBB
June Employment ReportTim Duy’s Fed Watch

Global Central Banking in 2014, A Second Quarter Update for 24 EconomiesWSJ

I’m Just Now Realizing How Stupid We AreFool

K is for Kruger-Dunning EffectPsy-fi

Market conditions bear a worrying resemblance to those of 2007 The Economist

BIS Annual ReportBIS

‘Euphoric’ capital markets are out of step with reality, warns BISFT
BIS warns that “euphoric” financial markets have become detached from the reality of a lingering post-crisis malaise, as it called for governments to ditch policies that risk stoking unsustainable asset booms.

Central Bankers, Worried About Bubbles, Rebuke MarketsNYT
BIS warned dangerous new asset bubbles were forming even before the global economy has finished recovering from the last round of financial excess.

Here are the countries showing early warning signs for banking crisesQuartz
According to the BIS report, Asia is the region that seems to be at most risk, with China in particular creating cause for concern. Switzerland, Turkey, and Brazil are also sending serious warning signals.

Tässäkö vaihtoehdot: liittovaltio tai euroton Eurooppa? – Suomen Pankki
Millainen on euron tulevaisuus? Suomen Pankin johtokunnan jäsenen Seppo Honkapohjan vieraina ovat kansantaloustieteen professori Vesa Kanniainen ja ETLAn toimitusjohtaja Vesa Vihriälä. Molemmat ovat julkaisseet vast`ikään kirjan euroalueesta, Kanniainen on toimittajana ”Euron tulevaisuus” -kirjassa ja Vihriälä yhtenä toimittajana ”EU:n suunta. Kuinka tiivis liitto?” [audio], [video].

Junckerin nimitys – ‘lisää Eurooppaa’ ja brittien EU-ero?Juhani Huopainen / US