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Italian and Spanish spreads: Further to fall?

Following a 2013 that saw euro area peripheral government bond spreads fall dramatically, 2014 has seen further reductions in funding costs. Spanish and Italian 10Y spreads to Bunds are now around 200bps, having ended 2013 around 20bps above that level. That compares very favourably to the start of 2013, when Italian spreads were almost 320bps, while Spanish spreads were close to 400bps...

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Euro Banks: Time for another check-up

The European Parliament yesterday passed legislation clearing the way for the European Central Bank to become the sole supervisor of the euro area’s largest banks next year, an early milestone on the long journey towards a euro area banking union...

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RBS - Is George's Heart Really In A Break-Up?

The UK government’s apparent volte-face over breaking up the 81%-taxpayer-owned Royal Bank of Scotland, revealed by chancellor George Osborne in his Mansion House speech on Wednesday evening, has clearly unnerved markets...

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Euro area economic forecasts: A little light at the end of the tunnel

The euro area remains in the second-deepest recession of its short history. Despite the emergence of a handful of “green shoots”, such as a pick-up in industrial activity and exports in certain countries at the start of the second quarter, sentiment remains...

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Floods in Germany: No impact on ECB policy

In August 2002 Germany was hit by one of its most severe floods in more than a century, causing total estimated damages of €9.2bn (around 0.4% of GDP). While the current floods are unlikely to be as damaging as those...

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