The Evolution of the ECB’s Thinking on Negative Deposit Rates

The OECD has been telling the ECB to cut rates since November last year; today, after nearly half a year, the tortise-like ECB acted, cutting two rates that don’t really matter much. The ECB opened up two more doors today, though it hasn’t walked through them: first on securitization of SME loans into ABS, and second, to lower […]

Nowakowski on CNBC to Discuss Cyprus

RGE’s Senior Director of Research David Nowakowski appeared on CNBC to discuss the evolving situation in Cyprus, where depositors are moving out, Russian investors are cautious and bank runs have returned. View the videos below, or go to CNBC for clips here, here and here.

Worst of the Eurozone Crisis Is Not Over Yet

All is relatively quiet in the eurozone these days – or at least that is what you might think, speaking to portfolio managers over the past few months. German chancellor Angela Merkel has visited Greece, Ireland has re-entered the bond markets and the ECB’s balance sheet is in play for Spain and Italy, so what […]

Mr. Draghi, Mr. Arnault, and Europe’s Gordian Knot

What does the ECB bond purchase program announced by Mario Draghi last Thursday have to do with French billionaire Bernard Arnault’s application for Belgian citizenship on Saturday? Both reflect a Gordian knot at the heart of the European Union that makes relatively straightforward solutions to the crisis elusive. This Gordian knot is, in turn, the […]

How Many Euro Breakup Scenarios Are There?

In a short note at Roubini.com, I calculate that there are nearly a quadrillion different permutations for the 17-member eurozone to break up into various single currencies, with a “rump euro” remaining if k>0. What are your views? And is the euro really irreversible, or is that just one possibility out of 1,000,000,000,000,000? Table 1: Euro Fragmentation Calculations […]

September Will Be a Doozy Again This Year

Before you take off for your August holiday, you should probably be aware of what you’ll be coming back to in the eurozone (EZ) in September (warning: the following may make you decide not to come back). For the second September in a row, developments in the EZ have the potential to be highly dramatic, […]

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