Podcast: Eco Waves
Globalization today: from multi to bilateralism 12/20/2018

Second episode of series of three dedicated to Globalization. William De Vijlder analyses the transition from multilateralism to bilateralism, in the USA-China relations in particular. What are the consequences of growing bilateralism and uncertainty for trade, capital flows? Interview conducted with François Doux

TRANSCRIPT // Globalization today: from multi to bilateralism : December 2018

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Globalization: an historical perspective 12/20/2018
First episode of three dedicated to Globalization. What made globalization possible?  In this first episode, William De Vijlder, the chief economist of BNP Paribas, distinguishes four drivers of globalization and discusses its limits. Interview conducted with François Doux.
Globalization tomorrow: the inclusion challenge 12/20/2018
Third and last episode of the series dedicated to Globalization. In past episodes its limits were mentionned, but what's new for the future of globalization? William De Vijlder discusses three levels of globalization sustainability:  inclusion, environment, financial stability – major challenges for economic policy. Interview conducted with François Doux.
Bank debt leverage: ten years later 9/5/2018
Following the 2007-2008 financial crisis, international regulators considerably strengthened the capital adequacy requirements for banks. Since then, the average bank leverage ratio (book value of equity/consolidated assets) has increased sharply in the eurozone and the United States, to 7.3% and 10.1%, respectively, at year-end 2017, compared to 4% and 6.9% in 2008. Looking beyond these trends, the relative ratio levels must be seen in terms of the very different financing means of the two economies and the structure of savings. First, in the United States, the economy relies more on capital markets than on loans reported on bank balance sheets. The securitisation of mortgage loans benefiting from Federal guarantees helps reduce the size of bank balance sheets. As a result, there is a partial transfer of banking system leverage towards less regulated entities. Second, bank liabilities account for a smaller share of household savings in the United States. Then, at the economic level, the probability that bank equity will serve as a buffer between any potential asset losses and savings is undoubtedly lower in the United States than in the eurozone.  
The cost of the protectionist threat 5/11/2018
Even if in reality nothing changes, worrying about protectionism may nevertheless act as an economic headwind because threats and counter-threats increase uncertainty.
How the willingness to take risk can evaporate 7/28/2017
News about monetary policy news influences asset prices via changes in expected cash-flows, the risk-free rate of interest and the required risk premium. Big fluctuations in the risk premium explain why asset prices are more volatile than news about ‘fundamentals’. These fluctuations reflect the heterogeneous nature of market participants. To go further Read the paper by William De Vijlder: How the willingness to take risk can evaporate
Doomed if you do, doomed if you don’t? 6/30/2017
Monetary policy normalisation is a balancing act: tighten too early could trigger a recession, hike too late could mean an inflation overshoot and a need to raise rates more aggressively. To go further Read the paper by William De Vijlder: Monetary tightening: Doomed if you do, doomed if you don’t?
Global: Synchronised surprises 1/11/2017
Recent economic data have been robust and have surprised to the upside: the numbers have been better than expected in the US, the Eurozone and in emerging markets (a universe which covers 20 countries). These synchronized surprises (all three indicators being in positive territory) do not occur that often. The recent experience may reflect that by coincidence things have improved simultaneously albeit for country specific reasons or it may show the impact of a common factor, like the prospect of fiscal stimulus in the US. The next several months will tell. Another striking element is the recent strong increase in the Eurozone surprise index which has now reached a level which makes it increasingly difficult to continue to surprise to the upside.
A weak euro for long 1/6/2017
The euro is very low again vs. the dollar. A situation that is likely to persist.
2017: A critical year for the climate negotiations 1/6/2017
In November 2016, the Paris agreement on climate change came into force and the countries even decided to accelerate the agenda for its implementation. However, the Trump presidency casts a shadow on further progress.
The charts of 2016 12/23/2016
2016 has been a surprising year in many respects. Brexit, the victory of Donald Trump, the shift in policy emphasis from monetary to fiscal, the OPEC agreement, the better reading of economic data in the latter part of the year, etc. In addition, equity, bond, currency and commodity markets have seen considerable swings reflecting changes in economic fundamentals as well as in investor risk appetite. This special year-end issue of EcoFlash provides a selection of charts we consider to be important when looking back at 2016 but also, in many cases, when looking ahead at 2017.

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