Monetary aggregates remain depressed The annual growth rate of the monetary aggregate M3 jumped to 2.5% y-o-y in January, from 1.5% in December 2011, but remains well below its reference value (4.5%). Loans to the private sector remained subdued at 1.1% y-o-y compared to 1.0% the previous month. The 3Y LTRO[definition] helped to alleviate the […]
The February 2012 issue of Perspectives is now available for download. We continue previewing articles, with Economist Jean-Pierre Durante’s view on the eurozone crisis in the spotlight today. Crisis coming to an end? Greece is on the brink of defaulting, Portugal seems to be following it into the abyss, but financial markets no longer appear […]
The February 2012 issue of Perspectives is now available for download. You will find below the opening column, written by Chief Investment Officer Yves Bonzon. The first of November 2011 will probably come to be seen as a key crossroads in the eurozone crisis – the moment when Jean-Claude Trichet handed the helm of the […]
Eurozone statistics are likely to continue to deteriorate probably until mid-Q1 due to the traditional lag between surveys and activity, even if the recent stabilisation in surveys is confirmed in the following months. As a result, we maintain our forecast of a contraction of 0.1% on average for 2012 for the whole euro area. Nevertheless, […]
The European Central Bank, under the helm of its new President Mario Draghi, lowered interest rates by 25bp yesterday. By acting for the second month in a row, the Governing Council confirmed that the deterioration of the economic conditions are sufficiently serious to justify bringing back the refinancing rate to 1%. The refi rate has […]
The work before the European authorities appears too huge to be solved in just a few days. The European crisis was not solved on Sunday and probably won’t be solved on Wednesday, when European heads of state are meeting once more. Five areas are currently in the focus of policymakers: sustainability of public finances, Greece, […]
Jean-Claude Trichet announced yesterday several measures designed to guarantee large amounts of liquidity throughout 2011 and 2012. A 12-month liquidity supply operation will be launched on 25 October and another 13- month operation on 20 December. The unusual 13-month maturity is probably designed to cover end-of-year liquidity needs which are traditionally important due to accounting […]
The intensity of the eurozone crisis has heightened considerably recently. Contagion has spread towards core countries like Italy and even France. Something has been broken. We can already say that the euro of the first decade is dead. The first proof is spreads (see chart below). When interest rates inside the monetary union are as […]
Despite the current very uncertain environment, the ECB’s Governing Council decided yesterday afternoon to raise its interest rates by 25bp. As a result the corridor between the marginal lending facility and the deposit facility remained unchanged at 150bp. The pre-crisis corridor was 200bp. Yesterday’s decision was taken unanimously and was probably dictated to a large […]
Greece’s cabinet yesterday approved the Medium Term Fiscal Strategy (MTFS) after days of acrimonious debate within the PASOK (Prime Minister’s party). It is worth recalling that the adoption of this plan is pivotal for Greece to obtain a new EU-IMF rescue package designed to fulfil its 2012 financing gap. Without this aid extension, the IMF […]
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