Wobbly markets face second-quarter correction

April 10, 2012

Markets are quivering again on renewed fears about global growth. But this time it would be wrong to assume that central bankers will ride to the rescue. Risk assets may face a Q2 correction as central banks - rightly - wean markets off their medicine.

The rupee looks vulnerable

April 30, 2012

India’s ballooning trade deficit means it has to run just to stand still. Without steady capital inflows, the currency will collapse. The rupee’s 19 percent fall against the dollar over the past year is worrying. Predictions of further decline could become self-fulfilling.

U.S. mortgage lessons lost in student debt policy

April 30, 2012

Lawmakers are close to making the same mistake on college loans they did with housing. When government subsidies help send prices soaring, borrowers should be restrained. To curb the crazy growth of higher education costs demands less, not more, of Uncle Sam’s involvement.

BofA reject wins Fannie Mae booby prize

June 6, 2012

No good deed goes unpunished. Tim Mayopoulos, fired as the mega-bank hid Merrill losses in 2008, is the mortgage zombie’s new boss. That won’t improve the firms’ tense relationship. And he’s taking a pay cut. But his integrity and background make him a decent fit for the job.

California shows way through tricky pension mess

June 8, 2012

San Jose and San Diego want current public workers to make sacrifices for their pensions, like contributing up to 16 percent more of salaries to fund retirement schemes. Backed by voters, the proposals look to be a sensible way forward in the thorny thicket of pension reform.

UK banks’ euro zone firewall needs government help

June 13, 2012

Despite a recent re-tooling, the Bank of England still can’t provide lenders with three-year loans like those offered by the European Central Bank. That could leave lenders exposed if the euro zone cracks. It may be up to the UK government to support long-term bank credit.

Corporate China beating banks at their own game

October 17, 2012

Banks and bondholders aren’t the only ones working to keep the country’s debt-fueled party from crashing: companies are also lending more to each other, for longer. As growth slows, the risk is that rising past-due bills make it hard for the private sector to repay mounting debt.

SOEs could be China’s economic vampire squid

November 13, 2012

State-owned enterprises soak up too much capital, and pay out too little. Their costs are too low, and their bosses too powerful. The country’s new leaders may yet have a chance to make SOEs work on more commercial terms. If not, China’s households will be the ultimate losers.

Moody’s downgrade is good news for France

By Pierre Briancon
November 20, 2012

The U.S. ratings agency has followed S&P in stripping France of its AAA status. The arguments are well known, and markets yawned. But the move will add to the pressure to plough ahead with reforms. It could even help François Hollande convince the French there’s no time to lose.

Fed’s foreign bank crackdown is price of stability

December 20, 2012

Forcing overseas lenders to properly capitalize their U.S. arms is necessary to protect the local - and global - financial system. The Federal Reserve’s unilateral approach could prompt others to follow suit. But fears that fragmentation will stifle global banking are overblown.