EUROPE
Turkey’s protests continue, Hollande declares crisis over, and Iceland suspends EU negotiations.
Erkki Liikanen: Banking after the regulatory
reforms - business as usual? –
BIS (pdf)
Governor of the Bank
of Finland and Chairman of the Highlevel Expert Group on the structure of the
EU banking sector, at the Bank of Finland SUERF Conference, Helsinki, 13 June 2013.
The two engines of the
euro zone bond rally are sputtering. Rising yields on risk-free debt are
hitting one, and the German constitutional court hearing has thrown a little
sand in the other. But a tougher ride for peripheral debt is not necessarily
all bad.
How will the turmoil
on the streets across Turkey affect the country's economic prospects? Its
economy has flourished over the last decade, but is it robust enough to
withstand political shocks? And does it matter to business whether the
politically conservative government of this secular nation takes a more
religious line? Nkem Ifijeka is joined on the banks of the Sea of Marmara by Pelin Yenigun-Dilek, an economist at the
Turkish Economic and Social Studies Foundation. And in London Manuela Saragosa
discusses whether the protests have scared off foreign investors with Turkish
Lawyer, Mutlu Manyas, and Guntram Wolff, acting director of the Bruegel
think-tank in Brussels. And Nkem also hears from the former chairman
of Goldman Sachs asset management, Jim O'Neill, on whether Turkey is still a good bet.
Deutsche Bank "Is Horribly
Undercapitalized... It's Ridiculous" – ZH
A top U.S. banking regulator called Deutsche Bank's
capital levels "horrible" and said it is the worst on a list of
global banks based on one measurement of leverage ratios.
Warnings Lurk in the Euro Zone’s Current
Account – WSJ
Spain’s
new transparency law could become the first step into a real process of
institutional regeneration – Europp
/ LSE
ECB
Fiscal implications of the ECB’s bond-buying
programme – voxeu.org
Paul De Grauwe, Yuemei
Ji: The monetary-fiscal policy connection is under scrutiny by the German Constitutional Court in the context of the ECB’s OMT bond-buying
programme. This column argues that most analyses are deeply flawed by the
misapplication of private-company default principles to the central bank. ECB
bond-buying transforms public bonds into monetary base, and sovereign-default
risk into inflation risk. The real question is: What is the non-inflationary
limit to money-base expansion? This depends upon the economic situation and is
much higher in the current liquidity-trap setting.
Rajoy calls on ECB to create bank lending
scheme for smaller companies –
Reuters
Spanish Prime Minister
Mariano Rajoy on Saturday called on the European Central Bank to create a cheap
funding scheme for small businesses, mirroring those used by authorities
outside the euro zone to try and get credit flowing via banks.
GERMANY
The reluctant hegemon – The
Economist
Germany must start taking the lead if Europe’s battered
economies are to recover, but is unwilling, due to the weight of history, the
perception that the “laziness of southern Europeans” is the cause of the
eurozone crisis, and the strategic approach of guiding “from the rear”.
The Merkel plan – The
Economist
Germany’s vision for Europe is all about making the continent more
competitive.
The ja and nein of euro rescues – The
Economist
German leadership: Overcoming the demons – The
Economist
Colours of the rainbow – The
Economist
Guide to Germany’s federal elections
UNITED STATES
IMF ARTICLE IV CONSULTATION
IMF ARTICLE IV CONSULTATION
The IMF lowered its
2014 growth outlook and suggested that the Fed should continue its $85 billion
a month bond buying until at least the end of 2013 and repeal government
spending cuts.
Concluding Statement –
IMF
Video: Press
Conference on Consultation – IMF
Transcript of a Press
Conference – IMF
IMF Sees Fed QE
Through 2013, Warns of Exit Plan Challenges – BB
U.S. Stocks Fall on IMF Outlook, Warning on Stimulus Exit – BB
IMF Urges Repeal of
'Ill-Designed' Spending Cuts – Economist’s
View
IMF to Congress: No,
seriously, guys, stop it – Wonkblog
/ WP
IMF Wades Into Fed
Exit Debate, Urges No Change Through 2013 – WSJ
IMF: It Ain’t Over
Till The Fat Lady Sings – ZH
Against Stupidity, The
IMF Itself Contends In Vain – Krugman
/ NYT
The Biggest Economic Mystery of 2013: What's Up
With Inflation? – The
Atlantic
Despite QE3, core
inflation just hit a 50-year low
FEDERAL
RESERVE
Asset purchases tapered in June? – Handelsbanken
(pdf)
We expect the FOMC to
taper asset purchases either at the June or September meeting. In our view, the
FOMC at its June meeting will either taper asset purchasing or explicitly
signal (in its post-meeting statement, for example) that a reduction in the pace
of asset purchases is coming soon.
Goldman FOMC Preview:
"Calming the Market" – Calculated
Risk
The Fed Is Tightening,
Whether or Not It Wants To – View
/ BB
Is the Fed Going to
Dial Down Its QE Taper Talk? – naked
capitalism
The Fed and emerging
markets: The end of the affair – The
Economist
Five Stages of Fed
Tapering – WSJ
MACRO
DATA
Industrial output flat
in May – Reuters
Industrial Output
Unchanged In May – The
Capital Spectator
Industrial Production
unchanged in May – The
Calculated Risk
Industrial Production
Misses, Capacity Utilization Lowest Since October – ZH
Industrial production
at zero percent in May, weaker than expected – Handelsbanken
Consumer sentiment
slips in June – Reuters
Preliminary June
Consumer Sentiment decreases to 82.7 – The
Calculated Risk
Sentiment: June
Preliminary Down Fractionally from May Final – dshort
Consumer Sentiment
Dips in Early June – WSJ
ASIA
Skittish markets are a
threat to Japan’s anti-deflation drive. The rising yen, falling stocks and lower government
bond yields suggest investors once again view Japan as a safe haven. The Bank of Japan may need to
be bolder to prevent their expectations from becoming self-fulfilling.
Ayako Saiki: Abenomics
is all the rage. Japan’s GDP grew at an annual rate of 3.5% in the first quarter, the stock
market went up by almost 30% since December, and despite some uncertainties,
sentiments, consumption, and exports are all picking up. However inflation is
at -0.9% and survey-based inflation expectation has remained flat. Is inflation
going to happen at all? This column argues the answer crucially hinges upon the
implementation of structural reforms, especially in the labour market.
Japan's
economic activity, prices, and monetary policy - monetary policy in the past
and present – BIS (pdf)
Speech by Ms Sayuri
Shirai, Member of the Policy Board of the Bank of Japan, at a meeting with
business leaders, Asahikawa, 13 June 2013.
Abenomics: Not so super – The
Economist
Saving Abenomics: No Time for Cold Feet on QE – PIIE
The third arrow of Abenomics: Misfire – The
Economist