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In RealTime posts, PIIE senior staff and colleagues discuss the fast-moving economic news, financial developments, and public policy choices confronting the United States and the world.
Like a majority of my Excel-equipped compatriots, I did a bit of post-election math, and what strikes me most about the first round of the French presidential elections on April 22, 2012 is the similarity to the 2002 results if you look at political voting blocs instead of individual candidates: Left: 43.8 percent (2012) vs. [...]
With Spanish 10-year bond yields soaring again above 6 percent, many critics question the wisdom of the Spanish government’s €10 billion in new austerity measures. As discussed on this blog last week, Madrid has been listening to the political demands of the broader euro area and the European Central Bank (ECB). The bank, after all, [...]
The issue of whether and how much to increase the lending power of the International Monetary Fund (IMF) to reinforce its ability to cope with the euro area crisis is among the most debated at the IMF-World Bank meetings this week. The pledges have reached $320 billion, which falls short the target of $400 billion [...]
Editor’s Note: On April 16 the Executive Directors of the World Bank selected Dr. Jim Yong Kim as President for a five-year term beginning on July 1, 2012. A decision on choosing the next president of the World Bank is expected this week—perhaps as early as Monday. The Obama administration nominated Jim Yong Kim, president [...]
North Korea executed its highly anticipated missile launch and with its failure managed to achieve the second worst outcome imaginable. (The worst would have been hitting China.) The North Koreans have managed in a single stroke to not only defy the UN Security Council, the United States, and even their patron China, but also demonstrate [...]
The financial systems in the United States and Europe have long differed on an important aspect. In Europe, most of the credit flows through the banks. In the United States the bank channel is less dominant, and borrowers gain access to capital directly by issuing bonds or through “non-bank” intermediaries that do not take deposits [...]
When a minister of finance and economics states that his country “does not need a rescue at this time” and the central bank governor cautions that banks will need more capital “if the economy worsens more than expected,” private bondholders are likely to take notice. As someone who has repeatedly maintained that a prolonged crisis [...]
Newspapers are full of stories and learned commentaries about the decline in the US dollar as the premier international reserve currency. These reports, to the extent that they are based on any facts, tell only a small part of the story of the evolution of international reserve holdings in recent years. The real news is [...]
European policymakers, particularly on the continent, have long appeared to be in denial over the systemic banking fragility that is central to the region’s problems. They have first denied the existence of a homegrown banking problem by shifting all the blame to Anglo-Saxons in 2007–09; then by engaging in timid, less-than-credible stress tests while redirecting [...]
The EU finance ministers met on March 30th and March 31st and—as predicted here—agreed to increase the euro area “firewall” in accordance with the expressed wishes of the G-20. Despite the press focus on the firewall’s size, however, this step was not the most important item on their agenda to achieve the longer term stability [...]