Breakingviews

Dixon: Follow Merkel on Brexit – and keep cool

June 27, 2016

While other EU leaders are pressing Britain for a quickie divorce, the German chancellor is advocating a more measured approach. This is right. There’s no need to rush as the EU can protect itself from the immediate fallout. There’s even a chance the UK could change its mind.

Brexit is reopening euro zone sovereign wounds

June 14, 2016

France’s bond yields are rising while Germany’s are falling. It’s a warning markets may doubt the integrity of the euro zone if a UK exit triggers copycat referendums. The ECB has neither the power nor the mandate to fight the kind of extreme outcomes that could ensue.

Draghi pulls a risky rabbit out of his hat

March 10, 2016

The ECB chief cut rates, said non-bank corporate bonds could qualify for a larger asset buying programme, and flagged new long-term loans. The good news is Mario Draghi is willing to go the extra mile. The bad: he may encourage excessive risk-taking without lifting inflation.

Dear Draghi: Time to buy bank bonds

February 12, 2016

Bank shares have slumped and bank bond yields are up. ECB chief Mario Draghi can stop the rout from damaging the economy by buying lenders’ debt. The moral hazard concerns are big, but manageable. Breakingviews imagines a memo from a bank CEO.

German CDS imply bank doom loop is unbroken

February 10, 2016

Market turbulence has led investors to snap up safe German bonds, yet the cost of insuring against a Teutonic default is up. Blame a rout in Deutsche Bank shares. Until Europe’s banking union is complete, governments are the ultimate backstop if big lenders get into trouble.

Guest view: Euro zone needs workable banking union

January 12, 2016

The 19 member states have so far failed to put in place a full regime of bank oversight, argues former Citi exec William Rhodes. As U.S. and euro zone interest rate policies diverge, this is a big risk. To complete banking union, agreement on proper deposit insurance is a must.

Giants of central banking will be cut down to size

December 30, 2015

The limited power of the Draghis and Yellens of the world is evident. They can’t conjure up inflation and the market impact of unorthodox monetary policies has waned. Rate-setters did their bit to support the global economy. It’s time fiscal and wage policies did more work.

Mario Draghi is central banking’s tragic hero

December 3, 2015

Despite new easing measures, the ECB chief’s fight to revive inflation looks doomed. Forces beyond his control, such as oil prices, are too strong. Markets are moving against him. Draghi is admirably determined, but will probably be remembered for trying rather than succeeding.

ECB has bright idea for targeted bank-bashing

November 26, 2015

Imposing a staggered penalty on banks that hoard cash is one of many ways to ease policy being discussed by the European Central Bank. Such levies have drawbacks. But at least a split-level charge would encourage the biggest hoarders to boost cross-border lending.

Portugal’s ropey bank rescue comes home to roost

November 16, 2015

The “good bank” part of bust lender BES needs another 1.4 bln euros, EU regulators say. If it ends up being sold cheaply, fellow banks that part-financed its rescue could suffer. Had Lisbon taken a tougher line with senior creditors last year, it would be in less of a mess.