Europe gets creative to win banks after Brexit

Wed Feb 1, 2017 | 10:56am EST

Reuters

By Anjuli Davies, Andrew MacAskill and John O'Donnell | LONDON/FRANKFURT
Regulators in European countries competing for post-Brexit banking business are offering London-based banks a range of short-term workarounds to help them relocate, bankers, regulators and lawyers say.

Global banks have warned they might have to move their European bases from Britain if its departure from the European Union means they lose "passporting" rights to operate across the bloc under the supervision of just one member state's regulator.

Brexit negotiations have yet to start and will take years but big centers like Frankfurt and Paris, as well as smaller ones like Dublin, Amsterdam and Luxembourg, are encouraging banks, insurers and fund managers to consider moving to them.

Theresa May Gets Parliament’s Backing on ‘Brexit’ Bill

By STEPHEN CASTLEFEB. 1, 2017

The New York Times

LONDON — Easily winning a crucial vote among lawmakers, Prime Minister Theresa May was well on her way Wednesday to winning the parliamentary approval that Britain’s highest court said she needed before she could begin talks on ending more than four decades of European integration.

Wednesday’s vote, in the House of Commons, will not be the final parliamentary verdict on Mrs. May’s plans, but with 498 lawmakers in favor and 114 against, it was emphatic enough to show that any subsequent efforts in Parliament to complicate, or slow, the path to withdrawal would probably be in vain.

China’s 6.7% Growth Fueled by Soaring Real Estate and Consumer Spending

By KEITH BRADSHERJAN. 19, 2017

The New York Times

BEIJING — China’s economy grew 6.7 percent last year and even accelerated slightly to 6.8 percent in the fourth quarter, the government announced on Friday morning, while dismissing concerns about the enormous lending that was needed to achieve that growth.

The strong results came after a weak start last year, when China’s currency and stock market were tumbling and many foreign investors fretted that the country’s three decades of robust economic expansion might be ending.

World leaders find hope for globalization in Davos amid populist revolt

By Max Ehrenfreund January 17 at 6:30 PM

The Washington Post


DAVOS, Switzerland — Amid growing doubts about the future of free trade and international economic cooperation, proponents of globalization found reasons for optimism as the World Economic Forum opened Tuesday.

The specters of President-elect Donald Trump’s protectionist rhetoric and the British exit from the European Union loomed over the annual event that attracts world leaders and dignitaries to this mountain resort town to discuss the state of the global economy.

In ‘Brexit’ Speech, Theresa May Outlines Clean Break for U.K.

By STEPHEN CASTLE and STEVEN ERLANGERJAN. 17, 2017
The New York Times

LONDON — “Get on with it.”

With those words in a major speech on Tuesday, Prime Minister Theresa May charted Britain’s course toward a clean break with the European Union and expressed her fondest hope: that the time for “division and discord” is over.

Her much-anticipated speech outlined what promised to be a hugely complex, drawn-out negotiation, and it defined the broad objectives, but not the details, of British withdrawal. “The United Kingdom is leaving the European Union, and my job is to get the right deal for Britain as we do,” she said.

Mersch Says ECB Policy Shift Premature as Economy Shows Strength

by Carolynn Look  and Fabio Benedetti Valentini
January 6, 2017, 12:00 PM GMT+2

Bloomberg

Improving euro-area economic numbers and a faster-than-forecast inflation pickup aren’t enough to warrant an immediate shift in the European Central Bank’s policy, according to Executive Board member Yves Mersch.

“It is absolutely premature today to claim victory over a weak economy,” Mersch, considered one of the more hawkish members of the ECB’s Governing Council said in Paris on Friday. “We have good results but it is absolutely premature to say: drop the guard.”

How Greece’s Troubled Economy Could Turn Around in 2017

Nicholas Economides
Updated: Jan 03, 2017 8:48 PM UTC
Fortune

Violating the terms of its bailout program, the Greek government recently announced that it will distribute a sizeable “Christmas gift” to Greek pensioners even though this requires additional borrowing from the EU since the Greek budget is not balanced and Greece cannot borrow from money markets. The move has prompted the EU finance ministers to freeze implementation of debt restructuring. Greece is at the brink again.

Euro-Area Economy Ended Year With Fastest Growth Since 2011

by Carolynn Look
4 January 2017, 11:00 π.μ. EET

Bloomberg

The euro-area economy finished 2016 with the strongest momentum in more than 5 1/2 years, bolstering the region as it heads into a year of political uncertainty.

A composite Purchasing Managers’ Index climbed to 54.4 in December from 53.9 in November, IHS Markit said on Wednesday. That’s the highest in 67 months and above a Dec. 15 estimate.

Record Capital Outflows Push Euro Toward Parity With Dollar

Higher interest rates in the U.S. are drawing money out of the eurozone

The Wall Street Journal

By MIKE BIRD
Updated Dec. 20, 2016 5:32 p.m. ET

More money has left eurozone financial markets this year than at any time in the bloc’s history, helping drive the euro toward parity with the dollar for the first time in 14 years.

The eurozone had its largest-ever net outflows in the 12 months to September, data from the European Central Bank showed Tuesday.

Eurozone investors bought €497.5 billion ($516.5 billion) of financial assets, such as stocks and bonds, outside the bloc in that period. Global investors, meanwhile, sold or let mature €31.3 billion of eurozone assets during the year. Together, that adds up to a net outflow of €528.8 billion, the most since the single currency was introduced in 1999.

As Brexit approaches, signs of a gathering economic storm for Britain

The Washington Post

By Griff Witte December 13 at 5:16 PM
LONDON — From a modest office in a small town in northeastern England, Elliott Peckett’s family stocked the world with costumes.

Billowy white Marilyn Monroe dresses. Red velvet Santa caps. Rhinestone-studded Elvis jumpsuits.

They were shipped out by the millions to 42 countries across the globe, and they brought the profits of countless Halloween parties, Carnival parades and Christmas wonderlands back home to England.

But thanks to Brexit, not anymore. After 122 years, Peckett’s costume company, Smiffys, is moving its headquarters to the Netherlands.

Inside China’s Global Spending Spree

By Scott Cendrowski
Photograph by Teru Onishi for Fortune
DECEMBER 12, 2016, 6:30 AM EST

FORTUNE

“One Belt, One Road,” China’s $3 trillion infrastructure-building campaign, could be a windfall for some Western companies and investors.

The high-rise coastal city of Dubai plays host to all kinds of luxury oddities: indoor ski slopes, gold-bar vending machines, vast artificial archipelagoes shaped like palm trees. But six miles inland, something just as unusual, if far less gaudy, is taking shape—the first coal-fired power plant in the Middle East.

Give Greece Credit, Even Just for Treading Water

25DEC 6, 2016 1:23 AM EST
By
Mark Gilbert
Bloomberg

Here are two things I'll bet most people don't know about Greece. The country's just-appointed minister of economy and development, Dimitri Papadimitriou, was lured away from his position as head of the Levy Economics Institute at Bard College in America. He's not a member of the ruling Syriza party. And the man appointed secretary general for public revenue in January is Giorgos Pitsillis, a professional tax lawyer. He's not a party member, either.

Weak Tea After Brexit

The May government’s additional spending won’t spur growth.

The Wall Street Journal

Nov. 23, 2016 8:47 p.m. ET


Theresa May’s government delivered another budget statement Wednesday, and we’re pleased to report that not all of the proposals are bad. But whether not-so-bad is good enough to give the economy the boost it will need to power through Britain’s exit from the European Union is another question.

Regarding the good, the best headline to come out of Chancellor Philip Hammond’s Autumn Statement is that the government intends to stick to its schedule for corporate tax cuts, with rates falling to 17% in 2020 from 20% today. That’s down from 28% under Labour Prime Minister Gordon Brown and would be roughly half the rate paid by companies in France and Germany. Mrs. May has also indicated she’s prepared to come down below 15% if necessary.

A Falling Euro Is Neither A Collapse Nor A Disaster - It's The Solution

NOV 20, 2016 @ 05:35 AM
Forbes

Tim Worstall ,   CONTRIBUTOR
I have opinions about economics, finance and public policy.

Opinions expressed by Forbes Contributors are their own.

The Express is getting rather overeager to tell us that a falling euro/dollar exchange rate is a collapse, an imminent disaster. When, of course, a change in exchange rates is the cure for what ails economies. That’s rather the point of having them in the first place rather than just the one world currency. So that if one economic area is doing differently than some other we can let the exchange rate take the strain of adjustment, rather than having to do that internal devaluation. You know, as the euro itself has forced Greece and Finland to do?

Another Financial Warning Sign Is Flashing in China

Bloomberg

  Bloomberg News
November 15, 2016 — 11:00 PM EET

Add another credit indicator to the financial warning signs flashing in China.
The adjusted loan-to-deposit ratio, which includes a range of off-balance sheet items and is an indicator of the banking system’s ability to weather stress, climbed to 80 percent as of June 30, according to S&P Global Ratings. For some smaller lenders, the ratio has already topped 100 percent, S&P estimates.

Japan economy: Exports help faster-than-expected growth

BBC

Japan's economy expanded at a faster-than-expected rate between July and September, due to higher exports.
Gross domestic product rose at an annualised rate of 2.2% in the three months to September, the third consecutive quarter of expansion.
Japanese firms have relied on overseas sales to make up for lacklustre domestic demand.
There are concerns a Donald Trump US presidency will hurt Japan if anti-free trade rhetoric became a reality.

Trump shift puts euro markets back on edge as elections loom

Mon Nov 14, 2016 | 1:07am EST

Reuters

By Dhara Ranasinghe | LONDON
Anti-establishment votes in Britain and the United States have roiled markets twice this year and investors are determined not to be caught off guard again.

In 2017, voters in the Netherlands, France and Germany - and possibly in Italy and Britain too - will vote in elections that could be colored by the triumphs of Donald Trump and supporters of Brexit, and the politics that drove those campaigns.

A litmus test for Europe is around the corner in Italy's referendum on constitutional change on Dec. 4. On the same day, Austria holds a re-run of a presidential election in which one of the two candidates is from the far-right.

Sterling soars to 6-week high against weakening euro

Thu Nov 10, 2016 | 12:54pm EST

By Jemima Kelly and Patrick Graham | LONDON
Sterling surged 1.5 percent to a six-week high against the euro on Thursday, as investors unwound short positions against the pound amid uncertainty about the fallout from the U.S. election and focused on upcoming European political risks.

The pound's almost 20 percent slide since Britain voted to leave the European Union in June has been the main currency story on developed markets in the months that have followed, and investors have built up record short positions against it on the view that it has further to fall.

But the fog of uncertainty created by Donald Trump's victory in the U.S. presidential vote, after a campaign that included a range of potentially disruptive policy pledges, from building a wall between the United States and Mexico to declaring China a currency manipulator, could provide a different set of impulses over the next few months.

Why India Is A Better Investment Bet Than China

OCT 26, 2016 @ 08:14 PM 5,942 VIEWS

Forbes

Panos Mourdoukoutas ,   CONTRIBUTOR,
"I cover global markets, business and investment strategy  "

Opinions expressed by Forbes Contributors are their own.

China may be the world’s largest emerging economy, beating India in many economic and financial indicators. But India is beating China in an indicator that matters the most to emerging market investing: financial market development. This means that India is less prone to a financial crisis than China, and therefore, a better investment than China.

China Gets Desperate About Debt

OCT 26, 2016 5:00 PM EDT

By Christopher Balding

Bloomberg

With its debts surging and growth sluggish, China has hit on a new strategy to revitalize its ailing economy. It’s the same as the old strategy. Only this time, it won’t work.

Earlier this month, China’s State Council released guidelines for a new swap program, in which companies can exchange troubled debt with banks in return for equity. The government hopes this will give the firms a chance to restructure on favorable terms, and avoid the prospect of “zombie companies” propped up indefinitely by state-owned lenders.