Europe

Reuters has reported that Bank of China, a dealer in China's foreign exchange market, has stopped doing foreign exchange forwards and swaps with several European banks. Separately, sources say the European banks involved are Societe…

Here’s what I am hearing. At the end, I will tell you how far-fetched I think these things are.

EUR/USD and European stocks recover amid hopes of Greece aid; market shrugs off Italy’s downgrade. BBH Sovereign Credit Rating Model suggests that further downgrades for Italy and Spain are likely.

What will the Europeans do here then? I am anticipating bailouts, liquidity injections and capital injections. But this is looking pretty dismal now so it is not clear if that will be enough.

Reader: It’s interesting that the ECB announced these liquidity mechanisms in place for some reason. Either, a Greek default, Italian or Spanish downgrade, or things inside the European banks are a lot worse than anyone is admitting. The…

In a post mirroring the policy prescription that German economist Hans-Werner Sinn recently gave, Nouriel Roubini advises Greece to default and exit the euro zone. Where Sinn is concerned about German taxpayers paying the bill left for…

In the next series of blog posts, we will look in more detail at fiscal and monetary operations of a nation with a sovereign currency. Before we do that, let us briefly examine the case of the Euro. Let me say that we will not address the…

In order for banks to hedge against multiple defaults in the eurozone periphery, banks must increase the ratio of equity to total assets at least five percent, a German researcher has argued. Dorothea Schäfer worked out for the Frankfurther…

European stocks snap a four-day amid Greek default concerns; EUR/USD gapped lower near 1.363. Markets this week are likely to be dominated by political risks in Europe, along with FOMC meeting. In the EM space, central banks from Czech…

The D-Process played out in greater initial force in the US private sector. Now Europe is playing catch-up, but more via the public sector due to the restrictions imposed by the Euro. Ray Dalio comments on how he sees this process proceding…