The recent “bail-in” of Cyprus by the EU, IMF and European Central Bank troika forced depositors in Cyprus banks to turn over about 40% of their assets to the banking system. This action hasn’t caused a bank run in the greater eurozone yet, so we asked professional investors why this is the case. Read more
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Thomas Mayer argues persuasively that Europe’s Economic and Monetary Union (EMU) could work if the member states would embrace a new EMU architecture. Even though all past monetary unions of sovereign states have failed, Mayer remains hopeful that the EMU can develop a more robust framework and contribute to the historical work of European unification. Read more
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Our ten most-popular articles from the past year include coverage of the ever-unfolding European sovereign debt crisis, how the election cycle affects the markets, and Warren Buffett’s secret sauce. Read more
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Top posts from last month included a roundup of research on how US presidential elections affect the markets, some suggestions for alternatives to the risk-free rate, and a look at the future of bond markets. Read more
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Unsurprisingly, a major theme of the Fifth Annual CFA Institute European Investment Conference was the prospect for the euro. While speakers put forward different arguments, ultimately it seems the resolution must come from choices made about the political economy. Read more
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At the recent CFA Institute Fixed-Income Management Conference, BlackRock Chief Investment Officer Rick Rieder contended that the fixed-income market is undergoing structural changes in the wake of the Great Recession that have not been present for at least 20 years. Among the major elements of this shift: the long-term continuation of artificially low interest rates and a shortening of investment time horizons. Read more
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Germany may well be experiencing a real-estate bubble — and the explanation is straightforward: the European Central Bank has lowered rates in response to the global financial crisis that began in 2008, and then dropped rates dramatically in response to the euro crisis, which didn’t gain steam until late 2009, and then pushed rates near zero in late 2011 — where they have remained. Read more
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Finance professor Amir Sufi of the University of Chicago Booth School of Business argues that the severe U.S. recession and Europe’s ongoing economic woes can best be explained as aggregate demand and leverage problems that cannot be effectively treated through monetary policy initiatives alone. Read more
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According to Jerry H. Tempelman, CFA, a more permanent solution to the European sovereign debt crisis will have to come not from the ECB but from the governments and citizens of its constituent countries. Read more
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Ron Rimkus, CFA, provides a wrap-up of the key issues affecting global markets for fundamental investors. Read more
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