Europe

Nice try attempting to pay employees bonuses while calling them “role-based allowances,” “role-based payments,” “a little something extra for your trouble,” etc, but the European Banking Authority is on to you. Read more »

Local Superhero Ready To Fix Europe

Europe’s leaders, adopting a money begets money approach, are looking to conjure a few billion dollars to juice up the continent’s economy. Perhaps they should give Cliff Asness a call. He’s always happy to weigh in on such things. Read more »

…in which case, better luck next time. Read more »

  • 17 Jan 2014 at 12:28 PM

Role-Based Pay Watch ’14: Goldman Sachs

Goldman Europe sees your bonus caps and raises you this: Read more »

  • 22 Oct 2013 at 6:08 PM

Europeans Near Resolution To Semantic Debate

Six years and countless working lunches after the financial crisis began, European regulators have at last nearly come to grips with one of its root causes. Read more »

  • 13 Aug 2013 at 12:47 PM

Europeans Embrace Dark Pools While They Can

The menace spreads. Read more »

Would you have predicted this?

This paper investigates the impact of credit rating changes on the sovereign spreads in the European Union and investigates the macro and financial factors that account for the time varying effects of a given credit rating change. We find that changes of ratings are informative, economically important and highly statistically significant in panel models even after controlling for a host of domestic and global fundamental factors and investigating various functional forms, time and country groupings and dynamic structures. Dynamic panel model estimates indicate that a credit rating upgrade decreases CDS spreads by about 45 basis points, on average, for EU countries.

I would not have! Perhaps I am biased from living in a country where credit ratings are a contrary indicator of sovereign interest rates, and where municipal defaults inevitably lead to helpful comments from ratings agencies like “If the payment doesn’t get made, we would downgrade the rating.” Apparently, though, sovereign ratings matter, at least in Europe and at least at some points on the ratings scale.1 Read more »

Bundesbank President Jens Weidmann does not mean to alarm you, but he thinks that Europe’s, um, difficulties could take a while to resolve. Read more »