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Will the European Central Bank turn to Quantitative Easing ? This is the question haunting all analysts and governments and, if one were to make a bet, better put it on the YES answer. Yes, the ECB will most probably end up doing just what the FED has been doing for years. The main reasons put forward in support of that policy is that there is no much choice: no one wants to lend to EU states and EU banks any more, not even the Chinese government, and the German economy doesn’t have the power to support everyone.

According to a recent economic outlook from Standard&Poor’s, high frequency indicators in the past month continue to depict Europe’s “darkening economic landscape”. Apart from being a problem by itself, a…

In one of the first studies critically to examine the Basel Accords, Engineering the Financial Crisis reveals the crucial role that bank capital requirements and other government regulations played in the recent financial crisis. Jeffrey Friedman and Wladimir Kraus argue that by encouraging banks to invest in highly rated mortgage-backed bonds, the Basel Accords created an overconcentration of risk in the banking industry.

Until now, the debt crisis seemed to spare the biggest European economy. But the country everybody is relying on starts to meet difficulties to refund its debt. The sale of German benchmark bonds on Wednesday turned to a disaster and the Bundesbank has been forced to hold on to record amounts (39% of the €6 billion Germany had hoped to sell) to ensure the auction did not fail. However, this is not so surprising if one takes a look on German 10-year real bond yield that turns to be negative:

French richest woman Liliane Bettencourt has been caught up by the fiscal authorities for tax avoidance. Mrs Bettencourt, they reveal, has an offshore bank accounts and acquired hiddenly an island…

A must-read piece by Alan Meltzer in The Wall Street Journal explains why the economic response to increased government spending is so different from the response predicted by Keynesian models.…

William A. Niskanen, chairman emeritus and a distinguished senior economist at the Cato Institute, has died at the age of 78. Niskanen was the chairman of the Cato Institute for…

The Coalition for Tax Competition asked members of the US Congress to cut the $100 million taxpayer subsidy to the Organization for Economic Cooperation and Development. Citing the OECD’s record as an opponent of tax competition, the letter released by the coaltion argues that US taxpayers should not be funding an organization which works against their interests by promoting a statist agenda.

An excellent report published by the Finnish think-tank Libera Foundation offers a novel historical perspective on the development of the Swedish economy.Contrary to the commonly- held view, this report is explaining the success of the Swedish model is not due to the Welfare State. Rather, it is a Johny-come-lately: expansion of public welfare started only around 1970. By 1985, taxes exceeded 50% of GDP and by the mid 1990’s Sweden had dropped from one of the top positions to a mid-level rank in terms of wealth and economic growth.

Slovakia’s parliament became the first in the eurozone to vote against bailing out indebted economies. The final vote on approving new powers for the €440bn European financial stability facility failed with only 55 of the parliament’s 150 MPs voting in favour, causing the coalition government of Iveta Radicova to collapse. Slovakia is the last of the 17 eurozone countries to approve the “improved” rescue fund. The Slovak parliament will remain in session and is likely to hold a second vote. Nevertheless, Slovakia has really good reasons not to approve the EFSF.