Goldstein, M. (2014) “The 2014 EU-wide bank stress test lacks credibility“, VoxEU Organisation, 18 November.   Results from last month’s EU-wide stress test are reassuring, especially for countries at Europe’s core. This column warns against a rosy interpretation. The test relies on risk-weighted measures of bank capital ratios that have been shown to be less predictive of bank failure than unweighted leverage ratios – a metric already adopted by the …Read More

Muellbauer, J. (2014) “Quantitative Easing for the People“, Project Syndicate, 05 November.   It is now a near certainty that, by the end of this year, falling energy and commodity prices will push annual inflation in the Eurozone below zero – well under the European Central Bank’s target of near 2%. Rather than continue to allow misguided conventional thinking, centered on German economic ideology, to impede effective action, the ECB …Read More

The Editors (2014) “What’s Bad for Germany Could Be Good for Europe“, Bloomberg View, 04 November.   Even those familiar with Europe’s plight will find the latest economic forecasts grim reading. You thought the outlook for the euro area was bad already. It’s getting worse, says the European Commission. That said, Europe works in mysterious ways. In this deepening pessimism, there might just be grounds for optimism. The projections make …Read More

Gilbert, Μ. (2014) “ECB Needs Japanese Lessons“, Bloomberg View, 05 November.   Economists like to warn about Japanification, the risk that a country will follow the desultory experience of Japan, which slumped into deflation in 1999 and for all intents never climbed out. As Europe slides closer to deflation, the European Central Bank should heed the historical experience and the current efforts by the Bank of Japan to resuscitate growth. …Read More

Mody, Α. (2014) “Pulling the eurozone back from the brink- whatever its flaws, OMT is the closest thing to a safety net the eurozone has“, Bruegel Institute, 02 November.   On October 14, as yet another financial storm gathered over Europe, the European Court of Justice convened in Luxembourg. In the coming months, the ECJ will assess the German Constitutional Court’s ruling that the European Central Bank’s “outright monetary transactions” (OMT) scheme …Read More

The Editors: “Europe’s Crazy Finance Tax“, Bloomberg View, 02 November 2014.   Wrangling among the 11 euro-region nations planning to tax financial transactions is further evidence, if any were needed, that the levy is a bad idea that should be abandoned. The European Commission acknowledges that the latest version of its planned financial transactions tax (or Tobin tax, or Robin Hood tax, if you prefer) isn’t the best option. That, …Read More