Gordon Kerr

Gordon Kerr is an investment banker, financial markets expert and founder of the British financial think tank Cobden Partners. Mr. Kerr is a frequent visitor and lecturer in Bulgaria.
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eurozone_crisis

  This morning, as Italians go to the polls to vote in a constitutional referendum, European TV channels broadcast a special programme going to the root of the referendum – Italy’s banking crisis.   A series of senior bankers, chairmen and chief executives expressed their views.  None were optimistic.   The head of Societe Generale in Italy offered the view that there is no point recapitalising banks who have no realistic hope of making any profits.  Another said effectively that non-performing loans (NPLs) were bad, but the threats facing Italian banks from non bank lenders and technological developments were much worse.  Yet a third conceded that Italy should have copied Spain and applied for a bailout from the European Stability Mechanism (unfunded bailout fund).   Then the young interviewer met with Prime

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Photo: Wikimedia Commons

  One of the benefits to European policymakers of Brexit is that it has dominated news coverage for months, diverting attention from several indicators that the banking crisis in Europe is inexorably worsening.   When Italy announced, a few days after the Brexit vote, that it was preparing a €40 bn government recapitalisation of its banking system, Rahm Emanuel’s observation, “You never let a serious crisis go to waste” sprung to mind. Prime Minister Renzi’s proposal was notable because it contravenes the EU’s banking union rules obliging all creditors, including unguaranteed depositors, to be ‘bailed in’ before the question of public funds is supposed to arise. It is difficult to see a connection between the UK’s declaration of preference for self-government and the dramatic drops in bank share prices on

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EU Brexit

  Bulgaria should ignore the vote and gird its loins for the next phase of Eurozone problems.   After a fierce campaign which has witnessed members of the ruling Conservative party turn upon each other with such unprecedented vitriol that it seems difficult to believe they could ever work together afterwards, the likely outcome is that Britain will vote to Remain in the EU.  This position has changed markedly in the last 5 days.  For the four prior weeks the Leave campaign crept up steadily in the polls, moving from a seemingly hopeless position until last week the polls were neck and neck.   The Prime Minister and his advisers badly misread the British public.  The more he pressurized an array of international statesmen and women to portend economic doom

This entry was posted in Europe by Gordon Kerr.

About Gordon Kerr

Gordon Kerr is an investment banker, financial markets expert and founder of the British financial think tank Cobden Partners. Mr. Kerr is a frequent visitor and lecturer in Bulgaria.