L'austerità nei paesi baltici. Krugman e lo shadow banking system. I matematici e la borsa (si parva licet componere magnis)

L'Economist dedica un approfondimento di 16 pagine all'economia USA: trovate qui una sintesi della loro analisi. Continua intanto il dibattito inflazione/deflazione negli USA: Brad De Long confronta i tassi a lungo termine del Treasury Bonds con quelli della Lettonia... L'unica via per ridurre l'indebitamento dei paesi baltici sembra essere l'austerità...ecco un reportage del New York Times su quanto sta accadendo in Lituania, un paese molto lontano da Mediterraneo, non solamente per il clima...

VILNIUS, Lithuania — If leaders of the world’s many indebted countries want to see what austerity looks like, they might want to visit this Baltic nation of 3.3 million.

Faced with rising deficits that threatened to bankrupt the country, Lithuania cut public spending by 30 percent — including slashing public sector wages 20 to 30 percent and reducing pensions by as much as 11 percent. Even the prime minister, Andrius Kubilius, took a pay cut of 45 percent.

And the government didn’t stop there. It raised taxes on a wide variety of goods, like pharmaceutical products and alcohol. Corporate taxes rose to 20 percent, from 15 percent. The value-added tax rose to 21 percent, from 18 percent.

The net effect on this country’s finances was a savings equal to 9 percent of gross domestic product, the second-largest fiscal adjustment in a developed economy, after Latvia’s, since thecredit crisis began.

But austerity has exacted its own price, in social and personal pain.

Pensioners, their benefits cut, swamped soup kitchens. Unemployment jumped to a high of 14 percent, from single digits — and an already wobbly economy shrank 15 percent last year.

Remarkably, for the most part, the austerity was imposed with the grudging support of Lithuania’s trade unions and opposition parties, and has yet to elicit the kind of protest expressed by the regular, widespread street demonstrations and strikes seen in Greece, Spain and Britain.

Paul Krugman dedica il suo ultimo editoriale alla riforma finanziaria: limitare le funzioni e le dimensioni delle banche oppure regolare le attività delle banche, lasciandole libere di crescere quanto vogliono? Krugman propende per la seconda soluzione, puntando il dito contro lo shadow banking system come principale responsabile della crisi:

Breaking up big banks wouldn’t really solve our problems, because it’s perfectly possible to have a financial crisis that mainly takes the form of a run on smaller institutions. In fact, that’s precisely what happened in the 1930s, when most of the banks that collapsed were relatively small — small enough that the Federal Reserve believed that it was O.K. to let them fail. As it turned out, the Fed was dead wrong: the wave of small-bank failures was a catastrophe for the wider economy.

The same would be true today. Breaking up big financial institutions wouldn’t prevent future crises, nor would it eliminate the need for bailouts when those crises happen. The next bailout wouldn’t be concentrated on a few big companies — but it would be a bailout all the same. I don’t have any love for financial giants, but I just don’t believe that breaking them up solves the key problem.

So what’s the alternative to breaking up big financial institutions? The answer, I’d argue, is to update and extend old-fashioned bank regulation.

After all, the U.S. banking system had a long period of stability after World War II, based on a combination of deposit insurance, which eliminated the threat of bank runs, and strict regulation of bank balance sheets, including both limits on risky lending and limits on leverage, the extent to which banks were allowed to finance investments with borrowed funds. And Canada — whose financial system is dominated by a handful of big banks, but which maintained effective regulation — has weathered the current crisis notably well.

What ended the era of U.S. stability was the rise of “shadow banking”: institutions that carried out banking functions but operated without a safety net and with minimal regulation. In particular, many businesses began parking their cash, not in bank deposits, but in “repo” — overnight loans to the likes of Lehman Brothers. Unfortunately, repo wasn’t protected and regulated like old-fashioned banking, so it was vulnerable to a pre-1930s-type crisis of confidence. And that, in a nutshell, is what went wrong in 2007-2008.

So why not update traditional regulation to encompass the shadow banks? We already have an implicit form of deposit insurance: It’s clear that creditors of shadow banks will be bailed out in time of crisis. What we need now are two things: (a) regulators need the authority to seize failing shadow banks, the way the Federal Deposit Insurance Corporation already has the authority to seize failing conventional banks, and (b) there have to be prudential limits on shadow banks, above all limits on their leverage.

Does the reform legislation currently on the table do what’s needed? Well, it’s a step in the right direction — but it’s not a big enough step. I’ll explain why in a future column.

Alfaobeta festeggia la vittoria della lista Noera per le elezioni del direttivo dell'AIAF (Associazione Italiana  Analisti Finanziari) che comporta una nuova responsabilità per yours truly. Vi terrò aggiornato: dopo un matematico gioca in borsa di John Allen Paulos chissà che non mi riesca di scrivere (magari con uguale successo!) un matematico analizza la borsa...

...attendendo il mio bestseller, se volete esempi di persone che sanno analizzare benissimo borsa e mercati potete cercare tra gli hedge fund managers di maggiore successo. Nella foto che illustra questo articolo del New York Times dedicato ai compensi del 2009 si nasconde un importante matematico: sapete chi è?