Tag Archives: ECB
The ECB’s Reluctant Rate Cut
The European Central Bank (ECB) bites the bullet and cuts target rates a quarter of one percent to 0.5%. This is the historical low for interest rates in the Eurozone, a sign that the ECB is coming to terms with the worsening economic situation. Critics will argue that it is too little, too late. In [...]
Does Cyprus matter?
As a matter of fact, it shouldn’t. The country is a small island in the Eastern Mediterranean, with one million people and not quite $24 billion in GDP; Cyprus represents a small fraction of the more than $13 trillion GDP of the Eurozone. Furthermore, the rescue package decided by the European Union (EU) over the [...]
Italian Elections officially Result in Chaos
The Italian elections have resulted in no clear winner and several losers. Most importantly, the already-precarious political credibility of the country appears to be lost, too. Prime Minister Mario Monti’s commitment to austerity and structural reform has been rejected by the voters; he won only 10% of the votes. The center-left coalition, led by Mr. [...]
Moving on to Brussels, Belgium
A delightful dinner offered by our Swedish hosts at an art museum in the woods of Stockholm archipelago; a 4am wake up call for the flight to Brussels and a major fail in recharging my computer will make today’s update short. **************** The economic outlook conference hosted by Swedbank highlighted once again some sharp contrasts [...]
Frankfurt, Germany
Hotel accommodations turned out to be a bit Spartan in Frankfurt: a hard mattress, a trickle of hot water in the shower and incessant traffic of heavy trucks all night long outside the windows. Despite the less-than-favorable conditions, I managed a good night of sleep ahead of a busy day of meetings in Frankfurt. *********************** [...]
Second Day of Meetings in Madrid
The highlight was definitely the strong commitment by Banco de Espana, the Spanish central bank, to the euro and, in particular, to the idea of a European bank supervisor at the European Central Bank (ECB) in Frankfurt. Accustomed as we are to turf wars among agencies in Washington D.C., this was a candid and refreshing [...]
First Day of Meetings in Madrid.
We sat with Spanish Treasury officials, chief economists (from the banking and energy sector) and the director of a think tank: Everyone seems to agree about the importance of the structural reforms that Spain has undertaken in a very short span of time. Under the pressure of the financial crisis and a near-25% unemployment rate, [...]
Travel Blog: Madrid, Spain
Arriving at the hotel from Madrid airport, as I reached into my wallet to pay for the taxi ride, I decided to do my own test about the health of the euro. With my best poker face, I turned to the cab driver, and I asked: “Euros, or dollars?” He looked back at me, maybe [...]
Travel Blog: A Closer Look at Europe and its Financial Crisis
I will spend the next ten days in Europe, with a delegation from the National Association for Business Economics. We are planning on meeting policymakers, business leaders and top economists in order to take the pulse on the economic conditions of the region at this crucial time. We are currently in Madrid, Spain, where our [...]
What is OMT? Explaining the ECB’s New Plan
Today the European Central Bank (ECB) announced a bond purchase plan (“Outright Monetary Transactions”, or OMT) to lift market pressure on sovereign debt in a few struggling countries: Greece, Spain, Italy. The plan entails unlimited purchases of short-term (up to three-year) government bonds and aims to keep a lid on borrowing costs at a time [...]
Bloomberg asks Diane Swonk to explain Fed concern over unemployment
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