After my introduction, one senior official explained the German position on a banking union in just five words: “We do not want it.” I looked around to see a sea of heads nodding in agreement.
Category: Economics
Fiscal Discipline in the Monetary Union
From the perspective of the centralised versus decentralised debate, it is immediately apparent that the compact is a decentralised solution of the US type, even if the decentralised solution is centrally imposed.
Learning to Love Volatility: Nassim N. Taleb on the Antifragile
Fragility is the quality of things that are vulnerable to volatility. Take the coffee cup on your desk: It wants peace and quiet because it incurs more harm than benefit from random events. The opposite of fragile, therefore, isn’t robust or sturdy or resilient—things with these qualities are simply difficult to break.
Watch Out, Ratings Agencies.
ABN Amro had “employed two former employees of S&P” to learn the agency’s methods, the judge said. It knew, for example, that for S&P to give the derivatives the top rating, its models had to show a likely default rate of less than 0.728%.
Getting to Normal
The de facto default by Greece early this year ended investors’ complacency. The government bonds of peripheral eurozone countries thus became toxic. Given the unprecedented nature of the Greek default, the market valuation of peripheral debt has been fluctuating widely, still searching for “fundamentals,” such as deficit or debt levels, that could explain the evolution of risk premia over time.
