The ECB and the Fed

By: Charles Wyplosz, Graduate Institute of International Studies

Facing different situations, the Fed and the ECB muddle through, each in its own way.

Fannie and Freddie on the rope

By: Wolfgang Münchau

When house price are expected to decline by 30%, some strange things are happening

European Parliament wants ECB to change inflation target

Beres and Langen propose higher target, target band, plus official inflation forecast; Trichet rejects the idea; also hints that second-round effects are finally happening; oil price falls below $130, though no consensus on what this means; Belgium’s King Albert II, meanwhile, rejects the resignation of Yves Leterme, and appoints mediators.

Some thoughts about causes and consequences

By: Wolfgang Münchau

One of the biggest fallacies of the current debate is that the high oil price casues inflation. That is not true. Central banks causes inflation.

“Shocked, shocked” about the ECB’s commitment to price stability

By: Eurointelligence ECB Watch

We are somewhat astounded by commentators who purport to be “shocked, shocked” that the ECB is pursuing a price stability target after all. You can’t blame those central bankers for not telling you.

Tales of Leverage

By: Satyajit Das

There are many ways to increase leverage in a financial transaction that is not properly understood, and not recorded in official statistics. This article gives some examples of the use of total return swaps, digital options, and credit leverage in CDOs.

The villains are not the bankers, but the economists

By: Wolfgang Münchau

This is not a financial crisis, but a crisis of economic policy. We should thus be sceptical when economists-turned-policy makers produce the same prescriptions now which they have been peddling for the last 15 years.

The French EU presidency - a bumpy road ahead

By: Daniela Schwarzer, SWP and Eurozone Watch

Since the Irish voted against the Lisbon Treaty, France’s political priorities for its six months EU Presidency seem overly ambitious and slightly out of touch with the overall political situation in the EU. The success of the French presidency depends crucially on Sarkozy's capacity to moderate a way out of the current deadlock situation and to refrain from polarising his allies.