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lagarde

European politics 23rd October 2020

Procyclical Financial Regulation: What Can Be Done?

The COVID crisis brought about impressive activism on the part of financial regulators. Measures taken to offset the impact of the pandemic included: 1) encouraging forbearance and avoiding automaticity in non-performing loan (NPL) accounting and provisions; 2) allowing the use of capital and liquidity buffers; 3) reducing the supervisory, operational and reporting burden; 4) delaying the entry into force of more stringent requirements; while 5) bringing forward more lenient ones; and 6) ensuring the continuity in the provision of critical functions. Governments provided guarantees to loans to companies and individuals affected by the pandemic, which enjoyed better regulatory treatment.

johnson

European politics 19th October 2020

EU27 And The UK: Product Dependencies And The Implications Of Brexit

In 2019, 50% of the imports and 47% of the exports were traded with the EU27, which makes the EU27 market the UK’s largest trading partner. In 2006, both, the shares of UK exports and imports to the EU27, were at the maximum level; since then both shares are on a general downward trend, the exports more than the imports. Since the referendum in 2016, the exposure to the EU27 market did not significantly change from the perspective of the UK. Hence, especially as a supplier, the EU27 matter for the UK. For the EU27, the UK is much less important as a trading partner: in 2019, only 4% of total exports go to the UK and 6% of the total imports are from the UK, respectively. While the trade shares decrease between 2001 and 2007, they remain relatively stable thereafter. Since the referendum in 2016, we have seen a slight decrease in the trade shares with the UK.

BoE

European politics 6th October 2020

A Mug’s Game

“Our base case for sterling remains unchanged: that some type of a compromise on state aid and fisheries will enable a barebones free trade agreement covering goods, and that the pound will enjoy a moderate 3-5% rally as a result. Assigning a percentage probability to the chance of talks collapsing is a mug’s game: everyone knows this remains a realistic probability.”

germany prusian flag

European politics 28th September 2020

Populism In Germany Is Becoming Increasingly Unpopular

Lidia Conde (Frankfurt) | Are there many? Or just a few? One in five Germans believes in populist arguments or has ideas which go against the system or the elite or pluralism. Two years ago, it was one in three. According to a study by the Bertelsmann Foundation, populism is less and less popular. However, watching thousands of people demonstrating against the anti-pandemic restrictions in a country which is a model in containing the pandemic, one wonders if Germany has not gone completely mad.

covid19 dilemma

European politics 25th September 2020

Europe’s second wave

Europe’s virus resurgence weighs on growth momentum: a sharp rise in virus cases has dampened European growth momentum, with the Euro area composite PMI new orders declining from a peak of 53 in July to 50 in September, following the sharp rebound from a trough of 14 in April. Weaker domestic growth momentum, in combination with uncertainty on US fiscal stimulus and rising real bond yields, has led the Stoxx 600 to decline by 5% over the past week to a two-month low of 355.

london city brexitTC

European politics 23rd September 2020

Brexit Anguish Is At The Forefront Again

UK’s equity market has trailed Europe’s considerably this year. The UK’s FTSE 100 Index is down over 20% while Euro Stoxx 600 Index is down just over 11% year-to-date in sterling and euros respectively. If we compare the two in Euros, the UK fares even worse on account of Sterling’s weakness relative to the Euro – another sign of the UK being hurt more by the risk of Brexit disruption and uncertainty.

london housing

European politics 20th September 2020

Across Europe, Inequality Hangs Over Housing Issues

European Views | Across Europe, real estate markets which were already daunting for lower-income buyers – like Germany or Portugal – are set to become even more gruelling because of new economic stresses caused by the pandemic. 40% of young people in Europe who are at risk of poverty consider prohibitive housing costs, one of the chief contributors to their plight, while a similar percentage of low-income earners already struggle with overcrowded living situations.

Boris Johnson

European politics 19th September 2020

Boris Johnson Pushes Unreason To An Extreme

Peter Isackson | The Guardian offered its readers what is certainly the most comic and hyperreal sentence of the week when it reported that “Boris Johnson accused the EU of preparing to go to ‘extreme and unreasonable lengths’ in Brexit talks as he defended breaching international law amid a mounting rebellion from Tory backbenchers.”

hard brexit

European politics 13th September 2020

How The UK Went From Leader To Laggard

Compared to 2019, when the entire market was eagerly watching events surrounding Brexit, both the Covid-19 crisis and the U.S. elections are attracting more attention than the imminent end of the transition phase. However, the clock is ticking without mercy, as EU chief negotiator Barnier keeps reminding us. In light of the time it will take for legal processes in the UK, as well as on the continent, only a few weeks remain to avert a disruptive UK exit from the European common market, DWS explain.