Breakingviews

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.

Renzi is still dodging big Italian pension fight

May 21, 2015

The prime minister has found a clever way to blunt a constitutional court ruling on pensions that threatened to blow a hole in Italy’s budget. That avoids a conflict with Brussels. But he hasn’t bitten the bullet on the bigger pension issue: bloated spending that stifles growth.

Edward Hadas: The uses and abuses of GDP

By Edward Hadas
May 20, 2015

The standard measure of output is a useful indicator of short-term trends. It can also help compare levels of development. In poor countries, faster GDP growth is a good policy goal. But in richer countries, GDP-think misses important economic changes and challenges.

Deutsche Bank revamp puts capital ahead of returns

April 27, 2015

Exiting Postbank, and cutting 200 bln euros of investment bank assets and 3.5 bln euros of costs, is what the German lender needs. A 5 pct leverage ratio goal is also higher than expected, raising the bar for European rivals. But it means investors face a wait for decent returns.

Review: The politics of anti-inequality

By Edward Hadas
April 24, 2015

Anthony Atkinson's "Inequality" is a UK-centric manifesto to help the poor and restrain the rich. The Oxford academic's specific proposals are mostly sensible, but they dodge serious questions about the role of the welfare state and the balance of national and global justice.

Review: Some of what is wrong with economics

By Edward Chancellor
April 17, 2015

Meghnad Desai mocks his fellow economists for not seeing trouble ahead during the early 2000s credit bubble. The retired professor wisely calls for more study of history and a less narrow perspective, but he is still too conventional. He ignores the crucial financial cycle.

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.

Singapore’s war on deflation hobbled by bubble

April 14, 2015

The city-state’s decision to hold back on monetary easing appears squeamish for a small economy battling low prices. But there are good reasons for caution. Singapore property has been pumped up by a multiyear credit boom. If air escapes too quickly, the damage could be greater.

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.