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June 21, 2017

Europe
Where Does Italy’s Bank Recapitalization Stand?

Italy is making real progress now. But completing the recapitalization of Monte and the restructuring of the two Veneto banks may not be quite enough.

May 31, 2017

China
Downgraded China Doth Protest Too Much

Moody’s recently downgraded China’s credit rating from Aa3 to A1, on expectations that the country’s debt stock—already over 250 percent of GDP—will rise further with slowing potential growth. Chines…

China pays more than other similarly-ranked countries on its government debt

April 27, 2017

China
PBoC Spins China’s Bad-Loan Data

In a recent speech at Bloomberg’s headquarters in New York, People’s Bank of China Deputy Governor Yi Gang reassured his audience on the level of non-performing loans (NPLs) in the Chinese banking se…

China's NPLs have risen

April 6, 2017

China
RMB Globalization, Once "Unstoppable," Heads Into Reverse

    “The globalisation of the [Chinese RMB] seems remorseless and unstoppable,” the Economist pronounced in April 2014.  A year later, a research-grant foundation asked me (Benn) to review …

RMB Globalization, Once "Unstoppable," Heads Into Reverse

March 1, 2017

European Union
Trump’s NATO Spending Demands Will Spur an EU Deficit Battle

    President Trump and Defense Secretary Mattis are putting unprecedented pressure on European NATO members to boost military spending, threatening to reduce America’s support for the alli…

Trump’s NATO Spending Demands Will Spur an EU Deficit Battle

February 7, 2017

Monetary Policy
Why Does the Fed Keep Lowering Its Unemployment Threshold?

    For years, Fed watchers have been getting antsy as unemployment falls toward NAIRU—the Fed’s estimate of the bound below which inflation rises.  But as shown in the graphic above, each …

Why Does the Fed Keep Lowering Its Unemployment Threshold?

January 19, 2017

Financial Markets
Mini Mac Trumps the Big Mac

The “law of one price” holds that identical goods should trade for the same price in an efficient market.  But how well does it actually hold internationally? The Economist magazine’s famous Big Mac …

January 10, 2017

China
China’s Exorbitant Detriment, Mirror Image of America’s Exorbitant Privilege, Is Costing It Dearly

The so-called Exorbitant Privilege of the United States, the power to conjure the world’s primary reserve currency, is reflected in the unique combination of being deeply in debt to the rest of th…

China’s Exorbitant Detriment, Mirror Image of America’s Exorbitant Privilege, Is Costing It Dearly

December 12, 2016

United States
Is the Emerging Market Currency Plunge Really About Trade?

Emerging market (EM) assets have taken a beating since Donald Trump’s surprise election victory on November 8.  EM bond prices are down 4.4 percent, equities 4.6 percent, and currencies 4.1 percen…

Is the Emerging Market Currency Plunge Really About Trade?

December 1, 2016

China
China’s Bond Market Can’t Handle a Global RMB

    The Chinese RMB’s ascension into the IMF’s SDR currency basket in October has been widely seen as an important first step on its path to becoming a global reserve currency.  But we woul…

China’s Bond Market Can’t Handle a Global RMB