Unicredit’s well-publicised rights issue was reported by the press as a resounding success. Underwritten by Morgan Stanley and UBS, the €13bn issue, priced at a 38% discount to the bank’s theoretical value before the rights, closed early. Some big Italian investors publicly declared their (...)
Regulators Provide Misleading Reassurances as to Bank Solvency
February 10th was the fourth anniversary of David Cameron’s “Bloomberg Speech” in which he promised an ‘in or out’ EU membership referendum if re-elected in 2015. This year, the EU’s Commissioner for Financial Stability, Financial (...)
In February 2017, the Italian government defused a heated confrontation with the representatives of licensed taxi drivers. They were asking for protection against forms of allegedly unfair competition, such as the platform Uber. The solution has been found when the government promised to put (...)
Governments around the globe are trying to limit the use of cash by their citizens. Most European countries already implemented upper limits for the amount of cash that can be used for payments. The German government is currently considering prohibiting citizens from paying bills of more than (...)
Economists do not regard the world as a zero-sum game, but as a positive sum game in which all voluntary participants in an interaction are winners and no one loses. Hence, people are cooperating voluntarily as buyers and sellers in markets as they are benefiting from both roles. It is not (...)
Since the financial crisis, government debt ratios have increased in many countries. Most studies indicate that there is a negative association between high medium- and long-term debt ratios and growth, although the exact magnitude of the relationship is being discussed. Since high debt ratios (...)
Criticisms of bank stress tests continue to mount, particularly as banks continue to struggle. A new problem recently emerged: the marked shortfall between the market capitalisation of most European banks and their book values.
This should soon lead to a new stress test methodology. This (...)
Purely for geopolitical reasons, namely frustration at the failure of the governments of individual member states to respond to repeated calls for “structural reforms”, your authors had taken the view in recent months that the ECB might increase interest rates this year.
Our views are (...)
Has the European Court of Justice interrupted a honeymoon between Gazprom and the EU?
The energy giant Gazprom has been investigated by the EU Commission over an alleged abuse of dominant position and anticompetitive practices. At the end of 2016, Gazprom submitted a proposal with changes to (...)
Europe recently faces, on one side, the potential isolationism of the USA (and the UK) and, on the other, aggressive competition from China. This provides an opportunity to the EU to confirm its support to free trade and to influence the conduct of trading partners.
A protectionist wind from (...)