Death warmed up

In the future, if another financial crisis should occur, banks will be allowed to fail. This according to the idea of ‘living wills’, also called ‘death panels’, which would make it easier to dismember important firms in a crisis, thanks to better organization of banks and regulators. Yet professional negotiators warn that improving the mechanics of an execution does not make the decision to put a big firm to death much easier. Living wills will only be a serious tool to protect taxpayers from being exposed to financial problems if they involve decisions about which bits of banking are worthy of a guarantee and protection.

Source: http://www.economist.com/businessfinance/displayStory.cfm?story_id=14558456

Nikki Van den Eynde

Next Step for Microfinance: Taking Deposits.

Lending small amounts of money offering poor people a chance to raise their standard of living, defined as microfinancing and introduced in the late 70s, has created itself a significant spin-off and possible problem. Currently another radical concept is starting to take hold: that the thing people really need, more than business loans, is a safe place to save their money. Other than lending money, having a savings account and benefiting from other banking products are typically heavily regulated. Oxfam America has been working hard to break those regulations and taking deposits to the next level, it also however takes microfinancing back to its small, community-based roots.


Vanhaverbeke Johan

Deflation continues in Europe

According to Eurostat, the rate of inflation has been negative in Europe during the past four months (from June until September).
In August, prices have fallen 0,2% and in September 0,3%, which is mainly due to the fall of oil prices and sharp drop in food prices. As a result of this deflation, consumers wait for making pricey purchases which has the consequence that there is also an economic output fall. But analysts expect that the deflation comes to an end; prices will be more expensive as from November and inflation will climb up further going into 2010.

Elien Wanzeele