European Parliament passes laws to shut down troubled banks. Reuters reported that the European Parliament passed new laws to make sure that taxpayers no longer foot the bills to bail out banks. Countries will be obligated to guarantee the first 100,000 euros in any savings account. It still does not address what happens if a very large bank fails. However, the ECB will have the authority to shut failing banks. (4/15/2014) Banking reform.
EU to reign in high-frequency trading. The Telegraph reported that Michel Barnier, the EU financial services commissioner, is promising strict curbs on high-frequency trading. (4/14/2014) Slow-walking HFT.
Annuities sales predicted to plunge. The Guardian reports that PriceWaterhouseCoopers expects sales of annuities to collapse by 75%, from about £12bn to £3bn. PwC found that budget reforms allowing retiring workers to have greater flexibility in how they handle their pension savings will open up an “advice black hole.” (4/13/2014) Annuities.
ECB’s Draghi warns on exchange rates. Adding to the debate on additional stimulus, Bloomberg reports that the ECB head warned that the almost 6 percent gain against the dollar in the past year is further jeopardizing price stability by cheapening imports and hurting exporters. (4/14/2014) Draghi ECB.
Schaeuble sees no signs of deflation. Reuters reports that the German Finance Minister Wolfgang Schaeuble sees no sign of a deflationary spiral in the Eurozone, although he did echo Draghi’s warning about the negative effects of exchange rates on the European economy. (4/14/2014) Deflation.