Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Archive for 25. Januar 2019

Cleaning up Italy’s banks is proving slow and painful

Posted by hkarner - 25. Januar 2019

Date: 24-01-2019
Source: The Economist

The scars of the financial crisis will be slow to fade

“The boils that had to burst have burst,” says Mario Deaglio, an economist at the University of Turin, of Italy’s banks. The latest carbuncle to come to a head is Banca Carige, which was put into temporary administration by the European Central Bank (ecb) on January 2nd—the first time the euro-zone regulator has exercised this power. The move followed a shareholders’ meeting in December that failed to approve the first tranche of a €400m ($455m) capital increase.

The ecb appointed three administrators, including Carige’s former chief executive and chairman, giving them three months to reduce the €3bn stock of bad loans and arrange a merger. Italy’s government issued a decree to guarantee the bank’s bonds for up to €3bn, and to support a precautionary recapitalisation, if requested. On January 18th Banca Carige said it would issue government-backed bonds to the tune of €2bn, and perhaps a further €1bn. But it maintains that it will find a market solution. The administrators will present a business plan next month. Den Rest des Beitrags lesen »

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Brexit Demands a New British Politics

Posted by hkarner - 25. Januar 2019

Guy Verhofstadt, a former Belgian prime minister, is President of the Alliance of Liberals and Democrats for Europe Group (ALDE) in the European Parliament and the author of Europe’s Last Chance: Why the European States Must Form a More Perfect Union.

Now that British Prime Minister Theresa May’s negotiated Brexit agreement has been soundly rejected by the House of Commons, the United Kingdom finds itself at a crossroads. The country’s future depends largely on whether its political leaders can put cooperation and the national interest before adversarial partisanship.

BRUSSELS – The populist revolts in the United States and the United Kingdom have each reached a critical juncture. At the start of his third year in office, US President Donald Trump is presiding over the longest federal government shutdown in history. Having painted himself into a corner, he remains largely at the mercy of congressional Democrats to negotiate an end to a crisis he created.

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The Euro has been an Economic Fiasco

Posted by hkarner - 25. Januar 2019

Date: 23-01-2019
Source: The Economist: Free exchange
Subject: The euro area is back on the brink of recession

After two decades of underperformance, that should not be surprising

IT BEGAN AS a joke: the Twitter hashtag #euroboom tacked on to news of any sign, no matter how faint, of a euro-area recovery. By 2017, when French, German and even Spanish GDP grew by more than 2%, it seemed to describe a real phenomenon. Alas, all too quickly #euroboom has turned to #eurogloom. GDP data scheduled for release later this month are likely to confirm that in the final three months of 2018 Italy’s economy contracted for a second consecutive quarter, satisfying one of the technical definitions of a recession. Germany appears to have escaped recession, but only just. The euro area, formed in January 1999, may pass its anniversary on the brink of another downturn.

The euro has been an economic fiasco. GDP growth in the euro area has lagged behind that in other advanced economies, and in the European Union as a whole, throughout its life—before the financial crisis, during the global recession and its euro-area encore, and even during the recent #euroboom. Perhaps the area would have done as badly without the single currency. But attempts to estimate euro-zone performance relative to a counterfactual world sans euro suggest not. The past decade has been especially brutal. A list of the world’s worst performers in terms of real GDP per person since 2008 contains places suffering geopolitical meltdowns—plus the euro-area periphery. Greece has been outgrown by Sudan and Ukraine. Cyprus and Italy have been beaten by Brazil and Iran; France and the Netherlands by Britain. Den Rest des Beitrags lesen »

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Morality and Money Management

Posted by hkarner - 25. Januar 2019

Robert J. Shiller, a 2013 Nobel laureate in economics, is Professor of Economics at Yale University and the co-creator of the Case-Shiller Index of US house prices. He is the author of Irrational Exuberance, the third edition of which was published in January 2015, and, most recently, Phishing for Phools: The Economics of Manipulation and Deception, co-authored with George Akerlof.

Following his recent death, Vanguard Group founder Jack Bogle was widely and generously eulogized – and justifiably so. But if everyone followed Bogle’s investment strategy, market prices would turn into nonsense and would provide no direction to economic activity.

NEW HAVEN – The death on January 16 of Jack Bogle, the founder of the investment company Vanguard Group, was met with a slew of flattering obituaries. Of course, obituaries often praise their subjects. But Bogle’s seemed more laudatory than usual. And I think there is a reason: Bogle was an unusually morally directed man.

Of course, we cannot judge his success by his personal wealth. When Bogle established Vanguard in 1975, he set it up as a nonprofit. The company has no outside shareholders; all profits are reflected in lower fees, not dividends.

By metrics other than founder wealth, the Vanguard Group is a huge success. It invests for 20 million people in 170 countries. It has $4.9 trillion in assets under management. It may be the world’s most significant investment company. Den Rest des Beitrags lesen »

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Is the World Prepared for the Next Financial Crisis?

Posted by hkarner - 25. Januar 2019

Yes, correct, Madame! (hfk)

Date: 23-01-2019
Source: foreignpolicy.com BY CHRISTINE LAGARDE

New regulations and reforms have helped, but major threats still loom.

The world in 2019 is still reckoning with the legacy of the global financial crisis, which is hardly surprising given its scale and lasting impact. Ten years on from the Lehman Brothers collapse, one question about the financial system keeps coming up: Are we safer than we were in 2008? The short answer is yes—but not safe enough. While there has been marked progress, more needs to be done, including keeping pace with potential new risks from a rapidly evolving financial landscape.

First, the progress. Banks have bigger and better capital buffers and more liquidity. Countries have taken steps to address systemic risks posed by institutions seen as too big to fail. Regulation and supervision have been strengthened; many countries have stepped up their focus on monitoring financial stability, and many now also conduct regular stress tests to check banks’ health. A substantial portion of trading in over-the-counter derivatives has shifted to safer central clearing systems.

For its part, the International Monetary Fund (IMF) has improved its ability to analyze and monitor sources of systemic risk. The IMF has improved its ability to analyze and monitor sources of systemic risk. It has partnered with national authorities to help them identify potential trouble spots, such as excessive consumer or corporate debt; develop tools to curb risks; and strengthen analysis of their financial systems.

What about areas where progress has been inadequate or where new risks have emerged? Den Rest des Beitrags lesen »

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