Finance & Economics
Finance & Economics
Fair Observer's analysis of important economic and financial issues, events and trends in global markets and the world economy.
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Global financial standard-setters are taking a new look at how international financial standards are used and implemented. Even as headlines remain dominated by the euro zone crisis, the financial world is transforming itself along multiple other dimensions. One intriguing but so far little-noticed development is the gradual shift in the role of global financial standard-setters, which are becoming more assertive in looking at how their standards are adopted and implemented around the world. Global financial standards have emerged since the 1970s as a by-product of global financial integration. While some global bodies set norms for small and arcane corners of finance, two cases stand out...
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An analysis of the economic growth during the Obama Administration. Professor Jeffrey Frankel of Harvard Kennedy School of Government examines whether the economic statistics really show no discernible improvement since President Obama's inauguration. With November’s election fast approaching, the Republican candidates seeking to challenge President Barack Obama claim that his policies have done nothing to support recovery from the recession that he inherited in January 2009. If anything, they claim, his fiscal stimulus made matters worse. And, despite recent improvement, the level of unemployment indeed remains far too high. Obama’s Democratic defenders counter that his...
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Germany’s hesitancy in signing a blank cheque to end the Eurozone debt crisis bewilders the world but is understandable in light of the German experience. The G-20 has told Europe that it is on its own. And the poor Germans find themselves in the unenviable position of being made the scapegoat. European solidarity and panicked governments demand that the rich nation of Germany lend some money to poorer cousins down south. This is the equivalent of an industrious rich man being accosted on the street and forced to hand over his money to poor people while bystanders nod in approval and relief at a “fair” and “charitable” distribution of someone else’s...
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By Lukas RöberAn overview of German efforts and investments to help the Tunisian economy recover. Tunisia, the country where the protests in the Arab world began over a year ago, still remains at the forefront of the democratic movement of the so-called Arab Spring. As leader of this reformation of governmental and societal structures, Tunisia is often seen as an example for possible scenarios of upheavals in other countries. Keeping in mind their important particularities, these countries aim at similar goals that all demand great fortitude. Therefore, economic slumps in particular would have disastrous implications on the stability and process of change. How is the political development currently...
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By Naim AmeurOptimism is starting to fade as the new government struggles to regain control of Tunisia’s economy. One year after the “Jasmine Revolution” of January 14, 2011, Tunisia has successfully advanced in its democratic transition and political reform process. On October 23, 2011, the election of the National Constituent Assembly (NCA) was well organized, and for the first time in history, it was fair. Al-Nahdha (meaning ‘the renaissance’ in Arabic), a moderate Islamic party won over 41% of the NCA seats. NCA members elected Hammadi Jbali, the second in charge of Al Nahdha, as Prime Minister. While the NCA is drafting a new constitution, Jbali needs to present quick...
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America cannot ignore its political similarities to some European countries and can learn much from their mistakes. Europe's economic woes threaten the American economy. More importantly, America should learn lessons from the European experience. America shares more with Europe's problem children than it cares to admit. The difference between winning and losing in today's economy is cultural and structural, rather than European or American. Europe is not a state but an integrated region with some states that have weathered the global downturn nicely and others that are effectively bankrupt. Europe's problems are not even defined by the euro-zone. Sweden has maintained its...
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By Bob PozenMitt Romney’s candidacy has inspired a great deal of debate about the role of private equity in our economy. Romney’s opponents have openly questioned whether private equity serves a legitimate purpose in a capitalist system. Many claim that private equity merely facilitates a transfer of wealth from employees of a company to the private equity managers that take it over. Most of the discussion has focused on the big picture: whether laying off workers can be good for the growth of the economy. Many observers have eloquently defended private equity’s role in such “creative destruction.” Here’s the National Record’s Reihan Salam: "[S]uccessful...
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The US must agree to give greater financial support to Europe’s troubled economies if they are to exit this recession. Those who believe that the shaky American economy will not be affected by the current European crisis or contend that its effects could be manageable for the Unites States, probably underestimate the risks behind a possible uncontrolled default within the eurozone. Some months before the upcoming presidential elections, the American President seems to be affected by how Republicans are reacting to what is happening in Europe and their shortsighted view to this problem. Though President Obama has often urged European leaders, especially German Chancellor Merkel, to...
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By John BrutonIt is time for Greece to evaluate the options before it and choose which path it wishes to take out of the recession. We read that there is a severe outbreak of anti German feeling in Greece. Under the second EU/IMF bailout, Greece is being lent extra money at interest rates far below those at which it could borrow commercially, and in the meantime a portion of its existing debts are being written off. However, Germany is being blamed for the unwillingness of the EU and the IMF to sign this second bailout, without, what some Greeks see as humiliatingly detailed assurances that - The money will be used properly, - Greece will adopt specified policies to cut back state spending and raise...