Talking point
European bank performance in 2014: Not so bad
Core revenues are getting better, loan losses are falling substantially and capital ratios have climbed to sustainable levels – European banks seem to have turned the corner in 2014, finally. Profits have more than doubled, asset growth has also resumed and banks have regained a bit of risk appetite. The outlook for 2015 is thus brighter than in most of the past few years. The still-elevated expenditure levels remain a significant drag on performance, though. [more]
Hot off the press
China rebalancing: Blessing and curse for Latin America
China is undergoing a rebalancing of its growth model. In the process, real GDP growth has started to decline and the economy is gearing for a higher share of domestic consumption and services and a lower share of investment. As a consequence, the composition of Chinese commodity imports is likely to change, with a slowdown in the demand for base metals and oil for instance, and an increase in the demand for foodstuffs and natural gas. Latin American countries are among the top suppliers of commodities to China, and, in turn, China is a key market for them. Chile and Venezuela are the economies most exposed to China’s economic rebalancing given their concentration on copper and oil, respectively, while Uruguay is likely to benefit the most as a food exporter.  [more]
European integration
Debate on free movement: Does the EU need new rules on social security co-ordination?
In the EU there is ongoing debate about so-called "social benefit tourism". Not only supporters of populist parties, but also broader sections of the population say that the current rules on free movement and coordination of social security systems virtually invite people from southern, central and eastern Europe to migrate into the social security systems of more prosperous partner countries and thus overstrain these systems. Reforms should, at the very least, aim at making the current law less contestable and easier for national authorities to apply. Much argues in favour of taking a generally more restrictive approach. The closer coordination of the social security systems sought in various quarters is not suitable as a driver of European integration. [more]
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