Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Archive for 15. Juni 2019

How to stop governments borrowing behind their people’s backs

Posted by hkarner - 15. Juni 2019

Date: 13-06-2019
Source: The Economist

Principles on debt transparency endorsed at a G20 summit may help

In 2016 the government of Mozambique confessed to secret debts of $1.4bn, or 11% of gdp, mostly as loan guarantees for state-backed companies. Growth faltered, the currency slumped and foreign donors pulled back. The results have been “devastating”, says Denise Namburete, a civil-society activist, describing health centres that have gone two years without medicines. American prosecutors are pursuing eight people involved in the scandal, including three foreign bankers and a former finance minister, on charges of money-laundering and fraud.

The Mozambique case may be unusual—or not. Even the imf is scratching its head about how much governments truly owe. In some places the mystery is loans from China and other emerging lenders. In others it is advance payments from oil traders, liabilities from public-private partnerships or hidden loans from commercial banks. The Institute of International Finance (iif), a group of banks and financial institutions, has responded to mounting concern by drafting principles on debt transparency. Finance ministers of g20 countries endorsed them at a summit in Fukuoka, in Japan, on June 8th-9th. Den Rest des Beitrags lesen »

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Drone deliveries are advancing in health care

Posted by hkarner - 15. Juni 2019

Date: 13-06-2019
Source: The Economist

No longer just in Africa, but in Europe and America too

A few years ago Jeff Bezos made a prediction. By 2018 his e-commerce empire, Amazon, would be delivering items by drone. Prime Air has yet to launch. But startups are making progress—mostly in health care, where they are vying to tap into a lucrative, $70bn global market in health-care logistics. As they deal with regulators and investors, these firms are charting the course for other aerial deliveries.

One of the best known is Zipline, based in San Francisco. It took off in Rwanda in 2016, where it is now a national on-demand medical drone network, delivering 150 medical products, mostly blood and vaccines, to hard-to-reach places. Maternal mortality rates are declining thanks to the delivery of blood. Other firms have used drones to supply medicines in Bhutan, Malawi and Papua New Guinea. Patients in many Swiss hospitals can receive results on the day a sample is taken. Zipline is expanding into Ghana and, later this year, into North Carolina, an American state with many out-of-the-way rural medical facilities. It wants to serve 700m people in the next three to four years. Den Rest des Beitrags lesen »

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Why Erkki Liikanen should be the ECB’s next boss

Posted by hkarner - 15. Juni 2019

I fully agree. He was leading the (unsuccessful) Liikanen Commission to regulate the EU Banking Industry. When he was commissioner in Brussels he flew once into Vienna to just meet us from the Föhrenbergkreis to discuss our work on „Spurensuche nach einer neuen Wirtschaftsordnung“. And he promoted our ideas in Brussels. (hfk)

Date: 13-06-2019
Source: The Economist

Mario Draghi’s successor must have expertise, judgment and political skills

One of the biggest jobs in Europe is up for grabs: head of the European Central Bank (ecb). It sets interest rates across much of the continent, supervises banks and underwrites the euro, used by 19 countries with 341m citizens. The ecb’s outgoing boss, Mario Draghi, who steps down in October after eight years in charge, has done a sterling job in difficult circumstances. His tenure illustrates what is at stake. After a sovereign-debt crisis in 2010-12 threatened to sink the euro, it was Mr Draghi who ended the financial panic by pledging that the ecb would do “whatever it takes” to stop the euro zone from breaking up.

Although he saved the euro, Mr Draghi leaves behind problems. The economy is faltering; a recession at some point in the next eight years is possible. There is little prospect of fiscal easing—Germany doesn’t want to borrow more and southern Europe can’t afford to. So monetary policy is the main lever to stimulate growth. Unfortunately interest rates are close to zero. And the risk of another debt crisis bubbles away. Italy’s populists have been ignoring demands from the European Commission to take control of the public debt, now 132% of gdp.

Europe’s political leaders will gather on June 20th and 21st to divide up the top jobs in Europe, including the ecb presidency. The temptation will be to make the central-bank position part of the horse-trading, picking the new chief on the basis of nationality. Instead, for Europe’s sake, the selection should be determined by three tests: economic expertise, political talent and sound judgment.

Technical competence matters. Interest rates are so low that the bank’s toolbox may need to be expanded in creative ways. Political nous is more important than at other big central banks such as the Federal Reserve. The new boss must build support in the bank’s 25-strong rate-setting body, and across 19 national governments and their citizens. The bank must also make the case for further reform to the euro zone, without which banking and sovereign-debt crises are a constant danger. And, if a crisis does strike, sound judgment becomes paramount. If the markets sniff equivocation or muddle from the ecb president, the financial system could rapidly spiral out of control, as panicky investors dump the bonds of weaker banks and countries. Den Rest des Beitrags lesen »

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The ECB presidency is distinct but not immune from backroom deals

Posted by hkarner - 15. Juni 2019

Date: 13-06-2019
Source: The Economist
Subject: Triangulation

Europe works in strange ways

“The longest lunch in history” is how Jonathan Powell, an adviser to Tony Blair, a former British prime minister, has described the appointment of the first head of the European Central Bank (ecb) in 1998. The French, keen to have their man in the job, had convinced the Germans that Wim Duisenberg, a Dutchman, should serve only half of his eight-year term before making way for a Frenchman. Mr Duisenberg resisted, giving in only after midnight.

The choice in 2011 of the third and current president, Mario Draghi, an Italian, involved less drama. Even so, France and Italy fell out after Lorenzo Bini Smaghi, another Italian on the bank’s six-strong executive board, initially refused to give way to a French national. “What can I do? Shall I kill him?” Silvio Berlusconi, then Italy’s prime minister, asked Nicolas Sarkozy when his French counterpart complained.

Mr Draghi departs in October. What tales will be told of his successor’s selection? The scope for theatrics is greater than ever. The choice is always political: national leaders make nominations and eventually agree on a name. But Mr Draghi’s term ends in the wake of European elections, as they are also deciding other top jobs. At a summit on June 20th-21st the European Council of leaders aspires to pull off a package deal covering the key roles. Succeed or no, the next few months will be a test of whether the process for choosing the next ecb leader has become any more sensible. Den Rest des Beitrags lesen »

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