Reasons to Fear a ‘Triple Taper Tantrum’ – Financial Times (subscription)
Why are we worried not just about a taper tantrum but a “triple taper tantrum”? Because central banks do not have a contingency plan for success. Even partial success – stabilisation of growth rather than an outright revival – could be enough to derail their best-laid plans for a smooth exit from excessive monetary accommodation.
How the Next Financial Crisis Will Happen – Wall Street Journal (subscription)
After the financial crisis, a focus on safety and soundness was good medicine for the financial system. New bank liquidity and capital policies, among other initiatives, strengthened a debilitated patient. The banking system is now stronger, with more liquid assets and better underwriting standards.
EU-US Equivalence – We Will Get There, Massad Says – Profit & Loss (free story)
The US and European Union are making “good progress” in resolving differences between their respective derivatives rules that threaten to foster market fragmentation, said Timothy Massad, chairman of the Commodity Futures Trading Commission.
Russian Reversal on Ruble Fooling No One as Dollar Buying Paused –Bloomberg
Six months after announcing a free-floating exchange rate, Russia halted this year’s biggest currency rally by buying dollars every day from 13 May. As the ruble then depreciated to levels that risked accelerating inflation last week, analysts from Citigroup, Rabobank and Renaissance Capital said the bank would halt its purchases. On Friday, it did just that.
Western Stock Exchanges Look to China for Market Growth – Reuters
China offers better growth prospects for stock and derivatives exchanges as making money in mature western markets becomes tougher due to overcapacity, top bourse officials said on Tuesday.
Yuan Gets Early Warning on IMF Ambition as MSCI Defers on Stocks –Bloomberg
China’s efforts to obtain reserve status for the yuan received an early warning, with a compiler of equity indexes saying the nation needs more policy changes before its shares can be added to an emerging-market benchmark.