1. Will European Regulation stop the Eurozone debt crisis?
The complacency of the EU Governments and central banks
Thursday November 1, 2018

2. General government gross debt: $ 63 trillion
Global public debt from 2005 to 2017 ($ trillion)
And __ Percentage of GDP
Source: Eurostat

3. General government gross debt: $ 63 trillion
And __ Percentage of GDP
Source: Eurostat

4. US government debt
And __ Percentage of GDP

5. Japan government debt
And __ Percentage of GDP

6. General government gross debt – Eurozone
Debt to GDP (%)
Billion euros
And __ Percentage of GDP
Source: Eurostat

7. The new environment of low inflation and unconventional policies has led to questions about the key tenets of the pre-crisis monetary policy consensus. Some observers now query whether the circumstances that justified central bank independence still exist – and whether the grounds for delegating monetary policy to independent authorities remain valid
And __ Percentage of GDP
Mario Draghi
October 26, 2018

8. The complacent monetary policies of Central Banks
And __ Percentage of GDP

9. US Fed and ECB Balance Sheets as % of GDP
Source: Bloomberg Professional

10. Bank of Japan holds half the Japanese debt

11. Eurozone growth slows down

12. European central banks holdings of sovereign bonds
% of total outstanding sovereign bonds
Source: Bruegel

13. The Basel III regulatory failure
BIS (2017):
“The Committee is of the view that the issues raised by its review and the potential ideas outlined in the discussion paper are important, and could benefit from a broader discussion. However, the Committee has not reached a consensus on making any changes to the regulatory treatment of sovereign exposures at this stage, and has therefore decided not to consult on the ideas presented in the discussion paper. The views of interested stakeholders will nevertheless be useful in informing the Committee's longer-term thinking on this issue.”
Source: BIS (2017) ‘The regulatory treatment of sovereign exposures - discussion paper’

14. The Eurozone sovereign crisis: a Greek saga
And __ Percentage of GDP
Source: S&P, Moody’s & Fitch

15. The Italian sovereign crisis: the economy
And __ Percentage of GDP

16. The Italian sovereign crisis: 132% of GDP
Sovereign debt as % of GDP
And __ Percentage of GDP

17. The Italian sovereign crisis: close to junk
And __ Percentage of GDP
Source: FT, Thomson Reuters

18. Macro risks Eurozone total sovereign debt: €19 trillion ECB holds
European banks
total sovereign debt
€2.7 trillion
ECB holds
€2 trillion in
sovereign debt

19. Jean-Claude Trichet, John B Taylor, Min Zhu, Ngozi Okonjo-Iweala and Takatoshi Ito
Our biggest risk is complacency in the face of unprecedented challenge in the next decade. More people will reach working age in the developing world than in any past decade. Reforms to strengthen governance, maximise the potential of technologies and markets, and create jobs are needed on every continent. But most crucially, we must succeed in Africa, where the poverty, demographic and environmental challenges are the largest — and so too the opportunities to contribute to a better world. The consequences of failure will not be simply economic.
And __ Percentage of GDP