Merler, S. (2014) “Vicious circle(s) 2.0 – while trying to sever the sovereign-banking link, we may be disregarding vulnerabilities from banks’ mutual interconnectedness“, Bruegel Institute, 20 November.   Since the beginning of the crisis – and more so since 2010 – Europeans have been looking at the sovereign-banking “vicious circle”, tying the dismal fates of States and banks together. This has emerged as a characteristic disease during the euro crisis, …Read More

Durden, T. (2014) “The Eurozone’s QE Problem“, ΘZeroHedge, 19 November.   Over the last couple of weeks, as the Federal Reserve ended their latest round of quantitative easing, there have been many calls that the pickup of the “QE Baton” by the BOJ and ECB. The problem is that the impact of liquidity interventions in Japan and the Eurozone do not carry the same “punch” as was witnessed in the …Read More

Gilbert, M. (2014) “Europe’s Bonds Are Unyielding“, Bloomberg View–European Economy, 14 November.   With central bank interest rates at or near zero in many parts of the world, borrowing costs for governments and companies have plunged to record lows. In Europe, corporate bond yields are now so low that it’s hard to see how fixed-income investors will be able to make money. It’s also difficult to imagine that yet more cheap …Read More