Breakingviews

Grenada offers debt restructuring model for Greece

April 9, 2015

The Caribbean island is close to agreeing a deal with creditors after years of wrangling. The deal structure, including warrants and phased debt relief, is equitable, and provides incentives for reform. It looks like a decent model for Ukraine—or even Greece.

Rob Cox: Race to bottom of global subprime begins

April 7, 2015

A new Chinese-led financial world order is emerging to challenge the IMF and World Bank. Republican U.S. presidential hopefuls Rand Paul and Ted Cruz are in a way enabling the fledgling framework. The possible competition in the market for national aid money could be worrisome.

Bad ideas catching up with Latin America in 2015

December 29, 2014

For four years, the region has mostly lagged world economic growth. The IMF predicts another year of the same. While Pacific-oriented countries will shine, Brazil, Argentina and Venezuela will suffer. With a couple of exceptions, misguided policies are coming home to roost.

Bland Lagarde will escape the Bretton Woods curse

August 28, 2014

The IMF chief is under investigation for signing off on a 403 million euro payout to a French tycoon. Her predecessor DSK and former World Bank boss Wolfowitz were both ousted for misconduct. Christine Lagarde, though, has few enemies. Being dull may prove her saving grace.

Can sterling hit $2? Only with a perfect storm

June 18, 2014

Having touched $1.70, the pound is on the brink of escaping its five-year range. A return to $2 looks like a fantasy right now. But a more hawkish BoE, a dovish Fed, a Scottish “No” to independence, and a narrowing of the UK’s twin deficits would do a lot to close the reality gap.

Blunt instrument is needed for global house bubble

June 16, 2014

The IMF is worried about the risk of a global house price bubble. Housing markets may be regional, but low supply and excess demand are common worldwide. Macroprudential tools and construction are part of the response. But anything other than an end to cheap money is tinkering.

What Lagarde should’ve told Smith College’s grads

May 14, 2014

The fund’s boss wimped out of speaking at the women’s college’s commencement after a petition accused the IMF of supporting “patriarchal systems.” That critique is old hat. Lagarde’s IMF has fostered social spending and female rights. Here’s what she ought to have said.

South Africa needs neighbors’ growth rates

May 2, 2014

Two decades after Nelson Mandela became president, the post-apartheid generation will vote for the first time in the May 7 election. The ANC represents his political legacy, but that’s undermined by the party’s weak economic results. Maybe the “Born Frees” can help change that.

Ukraine bailout can work if politics are fixed

March 27, 2014

The IMF has announced a $14-$18 bln aid package for Ukraine conditioned on medium-term reforms. Kiev will get emergency relief while pain is delayed. But the Fund’s third attempt to help will only work if Ukraine gets a stable and decent government after the May election.

Bondholders will have to pay for Ukraine’s reset

March 5, 2014

The country’s bonds keep sinking in spite of an upcoming IMF package. Creditors are facing either a soft debt rescheduling or more radical haircuts. The risks of austerity, devaluation and continued political uncertainty all point to the latter. Market prices still look rosy.