via FT Alphaville: On the plus side, no Mongol invasions in Europe this year
Gorgeous timelapse of European state-making, 1000-2003:
Does it, er, say anything about the eurozone or sovereign finances in 2012? Yeah we think so - if only to remind that it took centuries to make little fiscal unions all over Europe.
Risk mitigation for European sovereign debt
EFSF: European Sovereign Bond Protection Facility launched goo.gl/lSrd4— Alea (@Alea_) February 17, 2012
Alea has embedded Twitter content very nicely on his Tumblr. I haven’t set it up properly here. Go have a look at Alea’s tumblr if you’re curious.
Risk mitigation for OTC Derivatives
Here’s something from the BIS (Bank for International Settlements), released on 24 January 2012:
Report on OTC derivatives data reporting and aggregation requirements, CPSS Publications No. 100.
CPSS = Committee on Payment and Settlement Systems.
I like settlements and clearing, as it is something I know about, more so than economic theory (that is a story for another day…).
Anyway, this is the final report on the OTC derivatives data that should be collected, stored and made available to all by trade repositories. It is part of the overall program by regulatory agencies, including the Financial Stability Board (FSB), to bring about OTC derivatives market reform.
Here’s a summary from the announcement (the entire 70+ page document is available for download, see link above):
By collecting such data centrally, [trade repositories] would provide authorities and the public with better and more timely information on OTC derivatives. This would make markets more transparent, help to prevent market abuse, and promote financial stability.
The report was expanded to elaborate on the description of possible options to address data gaps…and updated to reflect recent international developments in data reporting and aggregation requirements stemming from the Legal Entity Identifier (LEI)… in support of a request by the G20 at the Cannes Summit, to advance the development of a global LEI.
* Emphasis is mine.
The matter of LEI’s is interesting. At the moment, we have
- Bloomberg Open Symbology
- all the proprietary global financial security identifiers already extant e.g. ISIN, CUSIP, SEDOL
Don’t forget XBRL, extensible business reporting language, which is more of a framework than merely an identifier.
There is certainly a lot of activity promoting standardization. I would expect some sort of standardization of standards on the horizon, possibly after the Euro crisis is less of a crisis than it is now. I hope that will happen soon.
According to some media reports, the high level of reserves – specifically the €412 billion deposited in the overnight facility… indicate that banks are “hoarding” liquidity injected by the ECB rather than lending to each other and the wider economy.
This is wrong. While an individual bank can reduce its reserves by lending or buying assets, this is not true for the system as a whole – the cash is simply transferred to other banks…
I should have reposted this sooner, date was 28 December 2011. However, the content remain valid.
Emphasis is mine.
Edward Hugh says via EconoBrowser (and in English):
there is another factor which gives what is happening now in Hungary special significance… “reform weariness”.
If the solutions which are being promoted by the IMF and the EU Commission are based on a faulty or incomplete analysis, the measures won’t work, and this will lead to disappointment. The political dynamics of what could happen is concerning….
Could Hungary be the first example of a country that has lost hope and gone down the road of believing in demagogic politicians? Could this be the future in Greece, Latvia, Portugal and Italy? And if it is, how the hell do you hold the EU, let alone the Euro together? This is the burden of responsibility for those making the decisions.
Originally in Hungarian, followed by the brutalization of Google Translate into English, then screen shot by me, downloaded to PC, back up to tumblr:
(From 2008 to 2009?) the Hungarian economy (GDP?) contracted by 7%. From 2000 - 2009, consumer prices increased by 72% and the currency merely depreciated by 8%. The currency can’t be devalued. Usually this could be accomplished by the Hungarian central bank. (Because of public indebtedness to Switzerland? Or due to Swiss franc denominated debts… to whom? By whom? Whatever the reason, it exists, and is detrimental).
The population is aging. Moody’s (and the other credit rating agencies) are downgrading Hungary’s sovereign debt. Based on this article, Hungary seems well aware of the situation and the causes. There is no anti-rating agency fury. If anything, based on this, Hungarians consider the situation to be bleaker than the foreign ratings agencies do.
Finally, the rate of increase of inflation increased from 2008 to 2009 (I think).