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Keeping Tabs — globalisation, green bonds and German judges

By Jasper Cox, Jon Hay, Ralph Sinclair, Toby Fildes
07 May 2020

There is a huge amount of information to take in at the best of times in the capital markets. During a crisis, it can be overwhelming. So, each week, Keeping Tabs brings you the very best of what we in the GlobalCapital newsroom have found most useful, interesting and informative from around the web.

To start with, economist Dani Rodrik argues in an essay in Prospect that there is not one set form of globalisation, and that the current model based on trade and finance is not inevitable. Referring to a recent interview in the Financial Times with French president Emmanuel Macron — an unlikely enemy of globalisation — Rodrik says that the pandemic crisis gives us an opportunity to centre our model of international relations more closely around the climate and health.

Onto one of the big news stories of the week: the judgement from the German Federal Constitutional Court (BVG) on the ECB’s Public Sector Purchase Programme. Here’s a view from Miguel Poiares Maduro, a former Portuguese minister as well as a former advocate of the European Court of Justice, whose original judgement the BVG refuted. Maduro suggests just the sort of fudge the EU loves when it bumps up against the immutable but contradictory rules of its centralised institutions and member states. 

In normal times, reports on financial stability and monetary policy from the staid old Bank of England would not exactly be reading to take home, or more realistically, to another part of the home than the one you are working in. But these are no normal times. We can’t confess to have read every word (perhaps we'll make that our patriotic VE Day 75th anniversary celebration treat) but Threadneedle Street has laid out a whole array of snazzy economic graphs for those who enjoy visual prompts.

Meanwhile, Ebba Ramel and Jacob Michaelsen at Nordea have carried out some research that takes forward the long-running debate over green bond pricing. It is very clear and concise, providing hard evidence of how green bonds have widened less than (roughly comparable) normal ones in the present coronavirus crisis.

Now onto the C-word itself. Robert Muir-Wood, chief research officer at Risk Management Solutions, a modelling agency, has examined how authorities in China and around the world were too late to contain coronavirus. This is hardly a novel argument, but Muir-Wood constructs it in a way that is both more forensic and more digestible than you might have seen elsewhere “The 40-day period over December 2019 and January 2020 will go down in history as by far the biggest ever failure in risk assessment,” he writes.

Finally, with the world now obsessed with R numbers, infection rates, testing levels and any other number of ‘rona stats, the BBC’s excellent More or Less programme dives into a whole host of the statistics that we are all now expected to master. Listeners will be no doubt  stunned to hear the government appears to have lied over some of its claims...

By Jasper Cox, Jon Hay, Ralph Sinclair, Toby Fildes
07 May 2020