Category Archives: European monetary union

Eurozone banks starting to show ‘stress’ as loan defaults rise, ECB warns

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Rising interest rates have boosted profitability but are likely to limit demand and increase risk of bad debts, says central bank

The balance sheets of eurozone banks are showing “early signs of stress” after a rise in loan defaults and late payments by customers, the European Central Bank has warned.

Higher interest rates have boosted banks’ income and profits for the time being, the ECB said, but lenders are facing pressures from higher funding costs, worsening asset quality and lower lending volumes.

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World Bank walking tightrope as it mulls increased lending to poorest

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Campaigners say bank should rush to rescue countries facing recession – but can it do so without resulting in mass debt write-offs?

Not since the early 1990s has the world faced such a period of low growth.

Discounting the havoc caused by the financial crash of 2008 and the initial impact of the Covid-19 pandemic, the World Bank says that by the end of 2024 it will have been 30 years since the global economy grew at an average of less than 2% a year.

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Markets brace for sharpest rise in US interest rates in almost 30 years

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Federal Reserve expected to increase cost of borrowing by 0.75 percentage points to curb rising inflation

The world’s financial markets are bracing themselves for the sharpest rise in US interest rates in almost 30 years, as America’s central bank takes action to halt rising inflation.

After days of frenzied investor speculation and signs of growing central bank anxiety, the Federal Reserve is expected to increase the official cost of borrowing by 0.75 percentage points for the first time since 1994.

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EU strikes €500bn relief deal for countries hit hardest by pandemic

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Compromise reached after Netherlands relents on ‘economic surveillance’ of beneficiary nations

A messy compromise to unlock €500bn (£438bn) of EU support for countries hit hardest by the coronavirus pandemic has been struck after Italy’s prime minister, Giuseppe Conte, warned that the existence of the bloc was at stake.

EU finance ministers on a video conference call struck a deal late on Thursday after the Netherlands shifted on a demand for “economic surveillance” of countries benefiting from €240bn of credit lines via the European stability mechanism, a bailout fund for struggling member states.

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ECB U-turn shows it fears coronavirus could destroy eurozone project

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Bank now realises Europe will sustain grievous economic damage from Covid-19

Weak. Clumsy. Behind the curve. The European Central Bank took stick for its initial response to the Covid-19 pandemic – and rightly so.

Those accusations can no longer be levied after the ECB used an emergency meeting to launch a gigantic new package of quantitative easing (QE) – the electronic money creation device that has become a key tool for central banks since the financial crisis of 2008.

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Fed bids to shore up confidence after worst week in 12 years

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Pledges of help from EU, China and Germany plus declaration of US emergency produce mild rally after torrid week

The world’s most powerful central bank, the US Federal Reserve, is preparing a fresh attempt to shore up investor confidence despite a late rally on Wall Street on Friday that ended a torrid week for stock markets on a more positive note.

Fresh pledges of help from China, Germany and the European commission combined with Donald Trump’s declaration of a national emergency over coronavirus to reassure investors after an ordeal for equities on both sides of the Atlantic that echoed the depths of the banking crisis.

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ECB announces fresh stimulus as eurozone economy falters

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Mario Draghi says bank will reboot quantitative easing in month Lagarde succeeds him

The European Central Bank has announced a fresh stimulus package in an attempt to prevent the fragile eurozone economy from grinding to a halt, with an interest rate cut and plans to pump €20bn (£19bn) a month into the financial markets.

In one of his final acts in his ECB presidency, before Christine Lagarde takes charge in November, Mario Draghi said governments across the eurozone needed to take greater steps to reboot growth by ramping up public spending or cutting taxes.

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