Argentina’s Default: A Not-So-Illogical Move

Argentina failed to reach an agreement with its holdout creditors last week, defaulting on its debt for the second time in thirteen years. In this piece for Foreign Policy, I explain why this outcome is not so surprising. You can read the beginning of the piece below:  On July 30, Argentina defaulted on its outstanding debt. The technical […]

Emerging Market Corporate Sector Debt: A Stitch in Time Could Save Billions

By Julian Chow and Shamir Tanna Much has been said lately about growing private sector debt in emerging market economies. In our recent analysis, we examined the corporate sector in a number of countries and found their rising levels of debt could make them vulnerable. Low global interest rates in the aftermath of the global financial crisis and […]

ECB Measures to Boost Bond Performance, Not Growth

Growth is still low … Yet to recover from the 2008-crisis, the global economy faces below-potential growth prospects. Until the developed world pays down sovereign and corporate debt, deleveraging and unemployment will constrain the recovery. Frail consumer confidence, sluggish demand and the ensuing drop in consumption in advanced economies will not be offset by final […]

Larry Summers’ Contradictory and Dishonest Defense of Administration’s Bank-Focused Crisis Response

If you are going to succeed in rewriting history, a necessary condition is that the public doesn’t remember it very well. Unfortunately, that requirement is not in place for the architects of the Administration’s blatantly bank-friendly crisis responses. Timothy Geithner’s book Stress Test, in which he tries selling the idea that rescuing the banks was […]

Banking on the Government

By Jesus Gonzalez-Garcia and Francesco Grigoli: (Version in Español) Government ownership of banks is still common around the world, despite the large number of privatizations that took place over the past four decades as governments reduced their role in the economy. On average, state-owned banks hold 21 percent of the assets of the banking system worldwide. In Latin American […]

The Private Equity Limited Partnership Agreement Release: The Industry’s Snowden Moment

Last week, the Wall Street Journal released an important story that chronicled how the private equity industry kingpin KKR systematically took advantage of its credulous investors via taking questionable charges through its related company KKR Capstone. That story depended critically on the Wall Street Journal obtaining the terms of the investment from a 2006 KKR limited partnership agreement […]

Is Credit Suisse Really in Jail?

Credit Suisse’s guilty plea to a charge of tax fraud seems to be a major step forward for a Justice Department that was satisfied both before and after the financial crisis with toothless deferred prosecution agreements and large-sounding fines that were easily absorbed as a cost of doing business. A criminal conviction certainly sounds good, and I […]

China: Market Mechanisms Need Official Help

Last July, the People’s Bank of China removed controls on the lending rate and began liberalizing savings rates. This aggravated the volatility of money market rates. It is becoming clearer to PBOC officials that even the successful functioning or market mechanism require an important official role. PBOC Governor Zhou told a conference in Beijing last […]