ECB

Facebook’s greatest recent challenge has been the fading of its brand. A veritable slew of newer social media platforms are cooler and more trendy than Fb, which now languishes in popular esteem as the social platform of choice for the out of touch greying generations, rather than youngsters.
Fb has 3.5 billion customers – half the world’s population. For these reasons, we think that its new currency Libra is interesting. In particular, it shines a light on continuing existential threat to the euro, which is only one of the presumably G7 currencies whose assets will back Libra. Will Libra succeed?

GDP in the EU area seems to be growing, but at a very slow pace. Although financial market remain sanguine, the real estate sector presents a mixed picture, with bad news coming from heavily indebted countries. While waiting for better news, the authorities are devoting their attention to the rating agencies.

Six years after the crisis exploded, experts still find it difficult to come up with satisfactory criteria to evaluate the banking industry. The good news, however, is that regulators are gradually becoming aware of how banks succeeded in circumventing the rules.

Something is rotten in the European Union! It looks like a hide and seek game, where countries and banks are playing a very dangerous game for the citizens’ future. Thus, between political instabilities, stealthy defaults, unhealthy and reckless banks and a real estate market that is artificially boucing back, there are many concerns about the EU’s future.

“There will have to be another program in Greece,” German Finance Minister Wolfgang Schäuble said bluntly on August 20th. The two previous bail-outs amounted to about 240 billion euros but that was not enough. According to the International Monetary Fund, one the Troika member, the estimated uncovered funding needed by Greece for 2014-2015 may amount to 10.9 billion euros.

Bumpy springtime for the ECB: no recovery, another major blunder and more regulation. Times ahead are becoming increasingly hard as more EU countries are in trouble, new regulations are being introduced and banking and sovereign borrowing are difficult.

The Cypriot crisis has enthroned Germany has the leading European country. European economics are likely to be German driven from now on. Thus, fiscal profligacy or faulty business models are considered to have caused the recent crisis and the German cure to this is clear: austerity and structural reforms must be enforced. Cyprus was first on the list.

The European Union is about to bail out Cyprus but no details on how it could be done are released yet. Joerg Asmussen, ECB board member, announced that “the troika of European Union, International Monetary Fund and the European Central Bank would send a mission of experts to Cyprus on Tuesday for a technical analysis of the country’s financing needs and to get a better understanding of the new Cypriot government.” Owing to the importance of the event for the Euro zone, it is worth reminding what Enrico Colombatto, IREF scientific director, wrote on Cyprus’ bailout.

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.