Transitioning From Crisis to Stability: Cailloux

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Dec. 10 (Bloomberg) -- Jacques Cailloux, Chief European Economist at Nomura International, discusses stabilizing monetary policy in the worldwide and his subsequent economic outlook. He speaks on Bloomberg Television’s “On The Move.” (Source: Bloomberg)

Same?

From a crisis situation to politicization state of situation, we are looking at the effect from stimulation policies that took place this year that were successful in realizing the market.

Unfortunately i must the negative side effects.

We demand.

The biggest challenge for 2014 will be the backdrop and in the banking sector.

You talk about too low inflation, are you worried about deflation?

The risks in the region we are seeing potentially a very large output gap and rapidly rising that is strong warning.

Not acclimated which i am very concerned about.

The currency is moving against.

We are certainly seeing signs that it is much higher than where it is currently emerging.

What you was concerned about -- ecb units or sovereign bonds will react or banks?

A mix of everything here.

The other side of the coin of deflation is built into the system.

This is very japanese in terms of the rebalancing of the economy.

To buy domestic bonds.

That is the next step.

That is where it will be critical if the supervisor let the banks continue to hold more of the sovereign bonds.

It will remain.

If they present their concerns as we have heard in the last few weeks about concentration risks of sovereign bonds, there's an issue there in terms of how stable the markets can be.

The share of foreign buying this year, it is not really been great.

As civilization has, from spain and italy from domestic buying.

-- the stimulation from spain and italy from domestic buying.

The sovereign bank mixes and in the context, a very important to how the race will be addressed.

Talk to me about currency.

Is europe's too high?

Could 2014 be the year when and that ease qe?

They have defied expectations and nicotine to do so.

If you look at the euro-dollar, stronger growth.

Taper around the corner.

Not so.

You look at the yen and it is moving lower.

Clearly, something going on.

Or have the expectations of relatively low inflation.

Maybe the current account with europe going toward a surplus and boosting the currency.

In that as you said, it will push the ecb in another territory.

We have seen it.

I expect micromanagement measurements to take place.

Maybe when i see the qe side of things if the recovery accelerates.

Certainly, the pressure will stay for the -- will stay.

What is your take on mark carney in the bank of england?

It seems the u.k. is firing on all cylinders.

There are firings i had.

It's a getting ahead of itself.

The speech we got out of carney last night which we started the conference between ben bernanke and sommers about stagnation.

He is on the scene which is important on whether we are in the liquidity trap.

It would mean the natural rate of interest, really rate, is lower.

He is arguing against that and the u.k., but certainly the fact he is spending so much time on this shows the caution he has about interest rate policies.

At the same time engaging on the house market to try to save time before lifting interest rates.

Very tough.

Not only interest rates over the horizon and the economy actually is quite strong at decisions up jacques, thank you so much.

Let's talk -- 10 years since the conference began in paris.

What is in store for the next decade?

Caroline hyde joins us from this year's conference.

The tech world is a different place compared to 2003. it was like and becoming more competitive.

Francine, think of the maya mental news that happened in terms of technology and the cap -- monumental news that has happened in the technology so.

Apple is selling 26 million ipods.

We are getting music through phones, any smart phone.

Competition arising.

This text has been automatically generated. It may not be 100% accurate.

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