Investors currently face great difficulty in trying to limit risk while desperately searching for higher yields. ZIRP and NIRP have made bonds uninteresting even as central banks continue buying up what is available on the market with the result that yields are kept artificially low. Central bank acquisitions on the stock market have pushed equity prices so high that new records have been set. David Stockman is correct in asserting that price discovery has been eliminated.
The Swiss National Bank’s foreign-exchange reserves, accumulated on a massive scale since 2012, dipped slightly last month to 693.5 billion Swiss francs ($721 billion), the SNB said Friday. The figures suggest the central bank has pulled back on its currency intervention efforts.
It was the second successive month, despite the central bank’s continued complaints about the effects of an “overvalued” franc.
The European Commission approved a €5.4 billion ($6.1 billion) state bailout of Italy’s Monte dei Paschi bank on Tuesday, allowing the Italian government to recapitalize and restructure the troubled lender. The gereen light came after the in-principle accord reached on June 1 by Economy Minister Pier Carlo Padoan and Competition Commissioner Margrethe Vestager.
The European Union’s executive arm said in a statement that it had approved the capital injection into Banca Monte dei Paschi di Siena SpA, or MPS, under the bloc’s state aid and bank resolution rules after the lender agreed to undergo a drastic restructuring.
Germany’s financial hub, Frankfurt, is trying to attract its share of the Brexit-driven banker exodus from London by appealing to "risk takers" working in the financial sector.
The UK is widely expected to lose financial passporting rights after its EU exit, which would represent a huge blow to its financial services industry. The EU’s passporting rules allow businesses to sell services across the union from anywhere within it and only require companies to be regulated in one country, rather than everywhere they operate.
Bank of England staff have voted to hold their first strike in more than 50 years in a push for higher pay, a union said on Monday, adding to pressure for an end to tight controls on public sector wages in Britain.
Unite, Britain’s biggest union, said maintenance and security staff at the 323-year-old institution would strike for four days from July 31 after they were awarded a 1 percent pay rise: “Unite has informed the Bank of England that its members working in the maintenance, parlours and security departments will be taking four days of strike action on July 31, August 1, 2 and 3 2017,” it said in a statement. That period coincides with the bank’s next monetary policy meeting.
Central bankers do not know what they are doing. The reason for this is that they are experimenting with the global economy. There has never been a similar situation in history to the one now unfolding because interest rates have never been so low or even negative and never have central banks resorted to QE as they have done in the last decade. They do not know what is going to happen if they continue the policies followed hitherto or if they try to “normalize” markets by reducing their balances and raising interest rates to “normal” levels. Another novelty is the huge sovereign debt that has been amassed since 2008.
Global debt levels have surged to a record $217 trillion in the first quarter of the year. This is 327% of the world’s annual economic output (GDP), reports the Institute of International Finance (IIF). It has grown by $75 trillion since the 2007-08 financial crisis reaching US$28,900 for every man, woman and child in the world
The surging debt was driven by emerging economies, which have increased borrowing by $3 trillion to $56 trillion. This amounts to 218 percent of their combined economic output, five percentage points greater year on year.
Banks in Switzerland saw their profits nearly halve to CHF 7.9 billion in 2016 amid continuing global pressure on their famed secrecy walls. Surprisingly, the overall customer deposits, domestic as well as foreign, rose in Swiss banks.
The staff count, however, was down, as the number of banks, which declined again last year, from 266 to 261, for the fourth year in a row. While two new banks came up seven moved out from the list, as per the annual statistics released today by Zurich-based Swiss National Bank (SNB), the country’s central banking authority.
