Profile picture
, 3 tweets, 1 min read
My Authors
Read all threads
Good article by @martinwolf_ on the excesses of leverage allowed in the non-bank parts of the financial system. Regulatory reforms were incomplete. It is necessary to go deeper on the sources amplifying the creation of inside liquidity and leverage /1
ft.com/content/098dcd…
A review of the role of repos and open-ended investment fund with daily liabilities must be a the core of the new reform effort. As I tweeted before, we must ignore the industry mantra that more funding and market liquidity is always a good think for “ price discovery”. /2
After the 2008/9 crisis, finance and debt continued to explode above GDP growth. For the second time in 10 years the State was forced to take over big part of private financial markets activity to save the system. It will be dangerous if no further reforms will happen this time/3
Missing some Tweet in this thread? You can try to force a refresh.

Enjoying this thread?

Keep Current with Vitor Constâncio

Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

Twitter may remove this content at anytime, convert it as a PDF, save and print for later use!

Try unrolling a thread yourself!

how to unroll video

1) Follow Thread Reader App on Twitter so you can easily mention us!

2) Go to a Twitter thread (series of Tweets by the same owner) and mention us with a keyword "unroll" @threadreaderapp unroll

You can practice here first or read more on our help page!

More from @VMRConstancio see all

Profile picture
Vitor Constâncio
@VMRConstancio
According to the newspaper El País,the Commission disclosed a proposal of a Recovery Plan of 1.6 trillion euros, financed by increasing the EU budget with countries’ contributions going up to 1.9% of EU GDP in 2022! To do transfers to countries and not loans that’s the best path
It is also the cleanest and quickest way to do it. After 2022, the size of countries’ contributions would have to stay high enough for the repayment of the Commission’s bonds issued. No need to issue perpetuals that the ECB could likely not buy. elpais.com/economia/2020-…
According to the news, Spain and France are already strongly supporting the proposal. Other countries will follow. The newspaper even reports a sort of approximation of Germany to French positions. This is within the Treaty, uses European Institutions and is not like Eurobonds /3
Read 4 tweets
Profile picture
Vitor Constâncio
@VMRConstancio
While Trump squanders US international leadership, China is gradually gaining clout. In Italy, a poll considered is as the best foreign friend. The US by de-funding the WHO or blocking at the G20 more help for emerging countries only spreads hostility 1/5 economist.com/leaders/2020/0…
More cooperation with China is becoming unavoidable and, yet, caution is also warranted. The EU’s competition chief urged European “governments to buy stakes in strategic firms to stop China from taking advantage of market turmoil to snap them up cheaply”2/5
The inevitable and increasing international importance of China has to be accommodated in the context of the multilateral institutions that Trump wants to undermine, like the WTO, the WHO or the IMF (The US is opposing the increase of IMF resources). 3/
Read 5 tweets
Profile picture
Vitor Constâncio
@VMRConstancio
I have seen tweets sent from Italy, criticising the ESM and quoting me. I want to recall the whole gist of what I have written. The ESM was crucial in the 2010-2012 crisis when several countries lost access to the financial markets and had very high yields 1/n
The ESM provided then long-term loans. Conditionality was controversial and too harsh in a few cases. Now the situation is different. Countries have access to markets and yields are on the low side. In this context, 2 years ESM loans are not very attractive.2/n
They also imply stigma and signal weakness to markets. Common debt issuance continues to be necessary, with the obtained resources being used by all countries. It would also be an important sign of solidarity in confronting a common shock 3/5
Read 5 tweets

Embed code for your website

×
Follow Us on Twitter!

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3.00/month or $30.00/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!