With bond yields collapsing in Europe the implied “bank run” on the periphery appears to be over. This is due to the ECB backstopping European banks for the next three years – in some sense they have taken on the lender of last resort role, just in a confusing, seemingly temporary, and poorly communicated way. …
Category Archive: EU economics
Permanent link to this article: http://www.tvhe.co.nz/2011/12/19/crisis-over-before-christmas/
Nov
11
2011
A point on Europe
Generally, Europe is already in big trouble. Current negotiations are around how far Europe wants to drag the rest of us down with them. Hopefully they go down this track.
Permanent link to this article: http://www.tvhe.co.nz/2011/11/11/a-point-on-europe/
Nov
03
2011
Incompetence in Europe
I fully endorse Krugman’s point here: These alleged technocrats have in fact systematically ignored both textbook macroeconomics and the lessons of history in favor of fantasies. The European Central Bank has placed its faith in the confidence fairy, while imagining that it can run policy in a way that has never worked in several centuries …
Permanent link to this article: http://www.tvhe.co.nz/2011/11/03/incompetence-in-europe/
Oct
28
2011
A matter of certainty
After negotiating a sizable haircut on Greek debt and pushing through an expansion in the EFSF we have seen markets rally. The current crisis has very much been one of people wondering “who the hell will bear the burden of default”. The closer we get to solving that question, the closer we get to putting …
Permanent link to this article: http://www.tvhe.co.nz/2011/10/28/a-matter-of-certainty/
Sep
06
2011
If Europe’s bank don’t trust themselves, why would anyone else?
Quite. (ht Marginal Revolution) The issues in Europe remain the most concerning thing for me at the moment – the US has a large drought and a weak patch, but at least we don’t have to ask if their central bank has the ability to always act as a lender of last resort. The fact …
Permanent link to this article: http://www.tvhe.co.nz/2011/09/06/if-europes-bank-dont-trust-themselves-why-would-anyone-else/
Dec
02
2010
Irish and Greek crises: Why is NZ different?
This post from Marginal Revolution has moved me from thinking to writing. On the surface there appears to be a lot in common with the Irish, Greek, and NZ economies. All three have high net foreign liability positions, liabilities are highly concentrated through banks who are borrowing overseas, all three have experienced some form of …
Permanent link to this article: http://www.tvhe.co.nz/2010/12/02/irish-and-greek-crises-why-is-nz-different/
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