Breakingviews

Cult of central bank transparency is too powerful

May 26, 2015

Rate-setters around the world are in a bind. The zeitgeist demands they share every twist and turn of their deliberations. But too bright a light can be blinding. Hard talk is often best done in private. While some transparency is good, more is not always better.

Bankers get ammo but no ally in regulation tussle

May 22, 2015

Financiers unhappy with tougher regulation can cite new analysis from the BIS. The central banks’ own central bank says new standards will probably change how economies and markets work. But the BIS is firmly focussed on coping with the new paradigm, not returning to the old one.

EU growth surprises hide clear pattern

By Edward Hadas
May 13, 2015

Recovering Spain was still the GDP star in the first quarter, but traditionally strong Germany did no better than perpetually stagnant Italy, while France defied gloomy predictions and the UK disappointed. Behind the mix-up, the recoveries are real, but mostly slow and unsteady.

ECB’s bank board-crashing makes sense – to a point

May 7, 2015

The euro zone’s financial stability gnomes will observe board meetings. Handled right, the ECB should glean extra insight – after all, corporate culture starts at the top. But regular sessions with board committees may reveal more about how Frankfurt’s 123 charges really operate.

Europe’s credit boom locks in mediocre returns

April 16, 2015

Investors are throwing money at European companies. Carrefour and Danone paid little over 1 pct a year to borrow for a decade; Novartis got 20-year funds at similar levels. A Breakingviews calculator shows how bond buyers’ generosity could backfire.

Hairy deals mean European animal spirits returning

April 15, 2015

Shell-BG and Nokia-Alcatel are complicated, long-mooted deals finally coming to fruition. Exor’s move is just plain ballsy. American firms powered last year’s $3.5 trln global M&A bonanza. With Old World boards and bosses becoming more daring, Europe looks set to catch up.

Wobbly stock markets are in thrall to central banks

By Edward Hadas
March 11, 2015

Performance this year reflects likely monetary policy. The euro zone is set to ease: equities are strong and insiders are selling down stakes in Zalando, JCDecaux and others at a record clip. The U.S. market is weaker as tightening nears. Dollar-exposed Asian bourses struggle.

ECB’s Greek bank warning stays within reason

February 5, 2015

The decision to restrict Greek lenders’ liquidity unsubtly hints that Athens should tone down its anti-bailout rhetoric. The ECB may have large discretionary powers – but so far remains within its remit. As previous examples have shown, the meddling could have been worse.

Negative yields can go much more negative

By Edward Hadas
February 2, 2015

Investors now pay for the privilege of owning almost a quarter of euro zone government debt. The practice sounds strange, but monetary theory calls for it. If deflation sets in, yields could keep falling. The result might be the end of cash, or a new theory about interest rates.

ECB, Syriza have broken euro zone’s German spell

January 27, 2015

The European Central Bank’s easing and the Greek anti-austerity party’s electoral victory show the euro zone is breaking free of German dominance. With loose monetary policy and banking union, it seems ready for growth-friendly policies that don’t ignore economic reality.