ECB Prices

§ December 13th, 2016 § Filed under general Comments Off on ECB Prices

The Fed for its part, also launched additional measures to improve the liquidity of the financial system that contemplate accepting a wider spectrum of guarantees to be presented as guarantee of credits and the expansion of the current for lending mechanisms, while, to avoid that the consequences were transmitted to Europe, the Central Bank of England and the ECB announced measures to assist liquidity to the financial system, and avoid potential problems of the entities. With all this negative picture, one is tempted to be pessimistic, but sometimes you have to try to find some positive aspect to the situation. Why is that I made an attempt to find what positive aspects can be derived from the current situation. First and in what refers to the regulatory issue, the crisis seems to be generating awareness on the subject both in the United States.UU. as in Europe.

In the United States.UU., both Barack Obama and John McCain, have recently announced that they will analyze the American financial system regulatory issue. Perhaps this awareness can make the regulation and supervision of financial systems to function more effectively and to at least avoid crisis of such magnitude although they can not avoid small episodes. Also, one can think that the resurgence of the crisis at this time may be accelerating the sanitation of the U.S. financial system, eliminating entities with problems more quickly. Thus, for more painful that it has been, faster consolidation of the US financial system, also implies a more rapid revival of the same and therefore, more likely that the recovery of the American economy can start supported by new financing that the system can generate.

On the other hand, we must not forget that prior to the crisis, and during a good part of what has been the development of the same, the world has lived with a growing trend in the prices of oil and agricultural commodity prices, which has resulted in a sharp increase in inflation in the world. Countries with many years of low rates of inflation, as in the case of Chile, are experiencing an unusual rise in retail prices. That is why the resurgence of the crisis, probably affecting quotes both the price of oil and agricultural commodities, making cede inflationary pressures ahead of schedule. Thus, those countries most affected with the increase in the price of energy and food, will gain time to rearrange and be better prepared for future episodes of this type. Of course, that also the drop in international prices of commodities will negatively affect Latin American countries who, like Argentina, have benefited from high commodity prices. And in the case of Argentina, think that just six months ago, the Government sought the way to seize a greater share of revenue for exports of soya, so controversial mobile retentions thus establishing, both originated in the sub-prime market crisis subprime, as problems that can confront Argentina with international context switching or the disadvantages that have Spain or Chile with the strong increase in the price of energy, they have a common teaching, which is that countries must work to limit the excessive fragility to key factors that can reverse their trend and hit hard the economies.

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