On the day Donald Trump was inaugurated for a second term, the main German stock index DAX briefly rose over 21,000 for the first time ever, suggesting that a large share of foreign investors—some estimates guessed around 70 percent—supported Trump’s “Make America Great Again” triumphant return as the fortyseventh U.S. president. This contrasts with the prevailing fear in … [Read more...] about Germany in Crisis
Historical Perspective
Deutsche Bank Robbery
Worries about the fragile state of the largest lender in both Germany and Europe, Deutsche Bank AG, dominated the unofficial agenda when bankers and finance officials from all parts of the world came to the annual meetings of International Monetary Fund, the World Bank, and the Institute of International Finance in Washington this October. At the time, the headlines in the … [Read more...] about Deutsche Bank Robbery
The History of Debt relief
In 1986, then-Senator Bill Bradley called for third-world debt relief at a meeting in Zürich. That was highly controversial. But the debt conversion and reduction move led, a few years later, to the success of debt relief in the form of the Brady Plan. Issuing “Brady Bonds” helped former problem debtors in Latin America regain access to capital markets. Ever since Greece’s … [Read more...] about The History of Debt relief
Draghi´s German Nightmare
Berlin – Just in time for the May European elections euro area leaders reached a compromise on the Single Resolution Mechanism (SRM) and the Single Resolution Fund (SRF), the second pillar of the European banking union project. As the ECB assumed the key role in defusing the eurozone sovereign debt and banking crisis with the levers of … [Read more...] about Draghi´s German Nightmare
From Deauville to Cyprus
When the history of the euro area sovereign and bank debt crisis is written, the way the troika of Eurogroup finance ministers, the European Central Bank, and the International Monetary Fund managed the rescue of the outsized Cyprus offshore banking center will be useful as a case study to document the extremely fragile state of European Monetary Union at that point in time. … [Read more...] about From Deauville to Cyprus