Daily Archives: October 31, 2011

Claire Jones

The Swiss National Bank’s decision to cap the franc’s gains against the euro was a big gamble.

However, the SNB’s interim results for the year to September, out today, show that – so far – it’s paying off. For the first time this year, the central bank is back in black. And that’s partly down to the cap.

The results also offer some clue as to the size of the SNB’s interventions into foreign exchange markets. Read more

Ralph Atkins

A European Central Bank research paper has taken a look at an issue deeper than the eurozone debt crisis – the impact of religion on economies.

The study does not represent official ECB views, but it is nevertheless interesting that it has been published. The ECB’s research output gives a flavour of its internal debates and perhaps European cultural divergences are on its mind. Read more

Claire Jones

The emergence of a vicious circle between the health of a sovereign’s finances and that of its banks threatens the eurozone’s stability.

If markets’ fears of haircuts on sovereign debt wipe out banks’ capital buffers, then that would necessitate a recapitalisation. But a recapitalisation could, in turn, push states’ debt-to-GDP ratios above levels investors consider sustainable.

But, luckily, research which appeared on VoxEU.org on Sunday, based on a paper published by the think tank Bruegel earlier this month, indicates that, at present, the problem is confined to Greece.

Policymakers should be relieved. However, that the problem can be observed in Greece’s case highlights just how essential it is for the eurozone authorities to avoid any talk of haircuts for the likes of Italy.  Read more