Foreign-bank lending to emerging markets during the global crisis differed from continent to continent. Lending by foreign banks is an important part of international capital flows to emerging markets and a defining feature of financial globalization. In the years preceding the recent global crisis, foreign-bank lending to emerging economies expanded rapidly—whether directly from foreign-bank headquarters (cross border) or through affiliates operating in host countries. In many countries, especially in Latin America and emerging Europe, lending by foreign banks became a significant source of funding for households and corporations. Although it had its pros and cons, on balance the presence of foreign-owned banks was generally believed to have enhanced competition and aided overall financial stability.
I have been tracking the savings rate on this blog for some time. What has been obvious to me and other observers is that the U.S. has had a declining savings rate since the secular bull market in bonds and shares began in the early 1980s. Indeed, it seems likely that there is a correlation between asset prices and savings rates in the United States.
Ireland has finally admitted the horrendous condition of its banking system. I actually give the government kudos for this, and await the moment when the US, China and the UK come forth with such frankness. That being said, things are a mess, I have forewarned of this mess for some time now. First, the latest from Bloomberg: Ireland’s Banks Will Need $43 Billion in Capital After `Appalling’ Lending
Bloomberg reports on Dr. Nouriel Roubini’s remarks on comparative growth in India and China. Dr. Roubini argues that India needs to invest in human capital and innovation if it wants to match Chinese GDP growth:
A great deal of the popular anger directed at big banks is completely legitimate, as put nicely by John Cassidy at the end of his interview with Treasury Secretary Tim Geithner,
This week’s newsletter is excerpted from an analysis by Nouriel Roubini: “The U.S.-China Currency and Trade Collision Course.” Dr. Roubini reflects on recent discussions with Chinese policymakers at the China Development Forum, including his suggested response to the flaring U.S.-China currency rift, as well as in-depth discussion of what might happen if the U.S. brands China a “currency manipulator.” Below is his outline of the problem.
After a poor night’s sleep, Macro Man was in a foul mood this morning as he stared bleary-eyed at his screens. That is, until he read this little pearl of investment wisdom, which induced a hearty burst of laughter:
Just a decade ago it seemed we were stuck with landlines. State-owned telephone companies were largely entrenched, sclerotic organizations that provided poor, delayed, or simply unavailable service —even in some rich European countries, and nearly universally in poor countries. These maps (with data from 2001, 2004, and 2008) show how cell phones have quickly bypassed the dysfunctional […]
I was asked by Periódico Diagonal to answer a few questions related to the Eurozone, based on several articles that I wrote (here, here, and here). I don’t know if these will be published, but “enquiring minds want to know”. Here we go:
The current series of proposals for reforming Wall Street and bankers are toothless facades of what real regulation should look like. It seems that each new proposal for reforming Banking and Wall Street is more banker friendly – and ineffective – than the previous one. They are milquetoast, meaningless, appeasing nonsense. The reformers are in a race to see who can offer up legislation that is least offensive to bankers.