financial markets
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The promises and risks of the EU’s single safe asset project
The launch of a Sovereign Bond-Backed Security (SBBS) is advocated by EU leaders as the best way to overcome the flaws inherent in the monetary union, which became notably obvious after the euro debt crisis of 2009. The SBBS is supposed to offer European investors new reliable stores of value, a credible alternative to national sovereign bonds and, as such, a miracle cure for chronic instability in European bond markets. The project, however, raises significant questions.
The EU’s next challenge: Emerging markets
For the global economy, the road ahead is unusually clear – it is headed for a gentle slowdown. But that is no reason for complacency. The next wave of trouble is already visible in the developing countries, which are highly vulnerable to rising interest rates. The EU could do much ...
Which Fed monetary policy ‘normalization?’
Should policies centered on more broadly defined money supply replace central bankers’ traditional preoccupation with interest and inflation rates? Is there a way to tame overregulation in the financial sector while making it more stable, more durable and more squarely based on entrepreneurial responsibility? Such changes may be possible – ...
Equity markets and the global economy
Company earnings are a traditional gauge of economic health and a powerful driver of financial markets. Recently, however, they have been sending contradictory signals. One reason could be the expansionary credit policies of the past decade, which have distorted balance sheets and weakened competition. The most likely outcome of this ...
2019 Global Outlook: Another year near zero
It has been a decade since global interest rates reached the zero lower bound, where monetary policymakers lose their ability to stimulate the economy using conventional policy tools. Among the largest global central banks, only the United States Federal Reserve has set its benchmark above 2 percent. Will this anomaly ...
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