ECB

Capital Calls: Oil vs. ESG

13 Sep 2022

Concise views on global finance: The price of a barrel of Brent crude has fallen 30% since mid-summer, and over 10% in two weeks. If it stays below $100 a barrel, oil companies will start to become worse investments. That could help solve backlash to ESG investing.

Capital Calls: ECB rate hike

8 Sep 2022

Concise views on global finance: Europe’s central bank risks recession to combat inflation.

ECB plays with fire while unspooling its hose

21 Jul 2022

President Christine Lagarde hiked interest rates by 0.5%, double the amount she flagged last month, and unveiled a vague tool to control euro zone bond yields. If monetary tightening hastens an economic slowdown, the central bank will need its new powers sooner rather than later.

ECB risks forgetting 1990s currency crisis lessons

18 Jul 2022

President Christine Lagarde may soon unveil the central bank’s tool to control sovereign bond yields. Struggles with semi-fixed exchange rates before the euro offer a cautionary tale. To fend off speculative attack, authorities are best off keeping targets and methods vague.

Japan’s post-Abe future, Europe’s currency problem

14 Jul 2022

The assassination of former Prime Minister Shinzo Abe is an end of an economic era. In this Viewsroom podcast, Breakingviews columnists debate how his party’s success could bring about big spending. Also, the euro’s decline is a problem for central bank chief Christine Lagarde.

Euro weakness forces itself on ECB’s agenda

12 Jul 2022

The single currency is nearing parity with the dollar for the first time in 20 years. It’s due to the U.S. economy’s strength and fears of a continental gas crisis. It also reflects the European Central Bank’s late response to inflation, which a weak euro makes harder to fight.

Italy starts countdown to risky life after Draghi

5 Jul 2022

The 5-Star party may bring down Mario Draghi’s coalition government. A crisis would hurt growth and raise the chances of a less EU-friendly executive. Worse, market jitters due to rising political uncertainty may complicate the European Central Bank’s efforts to tame bond yields.

Capital Calls: EU bank windfalls

4 Jul 2022

Concise views on global finance: The European Central Bank is worried banks will pocket a windfall on special loans when it starts raising rates. But deciding whether the bonanza is too big is a political choice.

ECB’s crisis weapon pledge is vague and late

15 Jun 2022

The European Central Bank will “accelerate” work on a new tool to control soaring bond yields from weak sovereigns. The lack of detail reflects divisions within the bank on when and how to use such a programme. It’s an invitation to markets to test the ECB’s resolve yet again.

Central banks still have space to fight inflation

15 Jun 2022

Jerome Powell and Christine Lagarde are tightening monetary policy to try to control soaring prices. Previous shocks have prompted the Fed and ECB chiefs to pause or loosen again. Despite plunging equity prices this time, calmer credit markets imply the “Fed Put” is far off.

UK lacks fiscal plan to buffer coming slowdown

13 Jun 2022

GDP has shrunk for two consecutive months while growth and inflation forecasts are the worst in the OECD. The Bank of England is fighting runaway inflation with ever-higher rates. As Brexit exerts an additional drag, the government needs a bolder approach to spending.

Draghi’s bond-buying triumph lacks obvious sequel

13 Apr 2022

The ECB’s plans to tighten monetary policy and the Ukraine war revive fears that weak euro zone members’ borrowing costs will soar. Though the former central bank boss tamed debt spreads in 2012, a repeat is tricky. Besides, governments that struggle can use tools Draghi devised.

EU’s Ukraine currency fix is a problem best shared

29 Mar 2022

The ECB wants the European Union to guarantee potential losses when Ukrainians fleeing the war change their currency into euros. A rival plan would leave this up to national governments. The pooled scheme is much more likely to give Ukrainians hope in the value of the hryvnia.

EU housing boom risk is more social than financial

11 Mar 2022

Watchdogs in Germany and elsewhere have hiked bank capital requirements and warned property may be 30% overvalued. Yet mortgage-lending standards remain solid, suggesting pandemic savings are mainly to blame for the runup. There’s little regulators can do about wealth inequality.

ECB chucks growth ball into governments’ court

10 Mar 2022

President Christine Lagarde is winding down asset purchases. It’s the opposite of what the central bank did in past crises, but high inflation is forcing her hand. Shielding the euro zone economy from the Ukraine war’s consequences will fall to politicians, who are slower to act.

Euro’s Ukraine battering intensifies ECB migraine

4 Mar 2022

The currency fell broadly, diving below $1.10, because the euro zone is exposed to economic fallout from Russia's invasion of its neighbour. The sliding exchange rate makes imports dearer, aggravating inflation. President Christine Lagarde’s policy predicament is getting worse.

Viewsroom: Ukraine, ECB and India’s giant insurer

17 Feb 2022

Worries about an invasion of Ukraine have rattled markets, but Dasha Afanasieva says Russian investors are more sanguine. The European Central Bank faces a tougher inflation juggling act, argues Swaha Pattanaik. And Una Galani discusses the listing of India’s Life Insurance Corp.

ECB has central banking’s hardest juggling act

15 Feb 2022

President Christine Lagarde faces a less acute inflation problem than U.S. or UK peers. But she’ll have to raise interest rates to curb price pressures while ensuring bond yield gaps between euro zone nations don’t widen to worrying levels. The two goals may become incompatible.

Guest view: Fed hikes spell emerging-market strain

4 Feb 2022

Poorer indebted economies face growing difficulties as the U.S. Federal Reserve signals its readiness to raise interest rates. William Rhodes, former president of Citibank, and economist Stuart Mackintosh lay out what creditors, borrowers and the IMF can do to avert a crisis.

ECB shows words matter more than actions

3 Feb 2022

President Christine Lagarde left interest rates unchanged while the Bank of England raised them. Yet she made the bigger market splash by admitting inflation risks had grown. It was the first clear sign that she may join global peers this year in tightening monetary policy.