Monetary Policy

Portugal’s three bad B’s: banks, budget, Brexit

22 Jul 2016

Lisbon’s banks are saddled with bad loans, and need capital. The government is caught between Brussels’ fiscal rules and a weak coalition. And the UK vote to leave the EU may hurt already grim growth. The three B’s may imperil Portugal’s BBB rating, and blow up its bond yields.

India’s shine dims with loss of central bank chief

19 Jun 2016

Raghuram Rajan will leave the Reserve Bank of India in September. Nasty politics may have forced his decision. The governor’s departure raises the risk that key economic and financial reforms he started will not be completed. India’s credibility in global markets will suffer

Chancellor: Helicopter money risks financial chaos

1 Jun 2016

Some investors, including fixed-income supremo Bill Gross, have been advocating a central-bank cash drop. Inflation would burn off the world’s excess debt. But bond markets might collapse and asset values sink. Protecting capital under such circumstances would be nigh impossible.

ECB corporate bond buying is risky experiment

1 Jun 2016

The central bank's pledge to buy company bonds has caused a surge in issuance. As a result, market spreads - the premium investors demand over sovereign debt - are not falling. The unwanted side effects of the programme show why corporate credit markets are best left alone.