Today A diabolic loop of stagnation

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The Corner contextualizes the EU’s economy from Spain with exclusive analysis from market leaders.

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All posts by Ana Fuentes

ECB: credit standards on EZ loans eased for the first time since 2007


MADRID | The Corner | A further sign of a recovery in credit: standards on loans within the eurozone have been eased for the first time in the 2Q in seven years, just before the financial crisis bursted, the ECB said in its regular Banking Lending Survey released on Wednesday. Net demand continues to recover for both household and enterprise borrowing. However, as we reported, the open bar announced by Mr Draghi won’t have an impact on loans until 2015 and, meanwhile, credit fall continues to accelerate in some peripheral countries, especially in Spain and Italy.

World economy

Why do foreign brands ‘Break Bad’ in China?

BEIJING | By Tang Jinghong via Caixin Multinationals like McDonald’s and KFC hop from one scandal to another in China, which says a lot about our problems handling food safety issues.

Credit flowing
In Europe

Credit in Europe – is it finally set to turn?

LONDON | The Corner | The winners in the “race for recovery” are those who get credit flowing again. In their Wednesday comment, UBS Global Macro Team points out that “the key to recovery coming out of a credit crunch is to get credit flowing again: the US and, to a lesser degree, the UK managed this in the early years following the financial crisis, but the Eurozone is still grappling with the issue. We think this one factor is the best explanation for the outperformance of US equities over Europe post-crisis. The S&P 500 is up 190% from the March 2009 lows, whilst Europe is up 120%.”

EM and QE

Is QE good for emerging markets?

MADRID | The Corner | The idea that quantitative easing has been helping equities of the EM has been widely discussed: many believe the liquidity generated by QE is used to play the “carry”, and that’s why the end of QE and the rates rises may lead to the withdrawal of those positions. But that’s not so clear. 


ECB: AQR results will be included in stress tests

MADRID | The Corner | ECB’s upcoming stress tests will have have the AQR findings incorporated (the so-called “join-up”), an element that was previously missing. And banks will be informed of the full and final results only shortly before they are communicated to the markets, as the central bank published on Thursday

german bund

Shot down plane = Bund at 1.14%

MADRID | The Corner | Thursday was shelter assets’ day due to the tragedy of the Malaysian Airlines passenger hit by a missile in Ukraine, the hardening of the Russia sanctions and the worsening of the conflict in Palestine, analists at Bankinter commented. The Bund reached a new historic low of 1.14% (the previous record was 1.17%) and the yen and Swiss franc appreciated up to approx. 137 and 1.214 respectively.



The financial drawbacks of being an emerging economy

NEW YORK | By Markus Jaeger via Deutsche Bank Research | The US today, like Britain under the gold standard, acts as the world’s banker. It is the most important source of international liquidity, leading countries to hold USD-denominated assets. Not only does this allow the US and especially the US Treasury to tap into a large investor base ready to finance current account and fiscal deficits at a lower cost. To the extent that the demand for international liquidity and USD assets exceeds the US balance-of-payments deficit, it allows the US to recycle short-term foreign liabilities into long-term assets.