Voices and Trends in European Business

Northern Europe is gonna do just fine because the US will have strong growth,and they will do well off that,according to Joseph McAlinden,Chief Investment Officer at Catalpa Capital.People are gonna feel wealthier and spend,which is good for the world economy.The US economy,the stock market is the buy on the gold seam right now.
French consumer confidence fell in March on the stalled economy.
US durable goods orders were up more than forecast.US home values are at their highest level since 2007.
An EU report says the employment outlook is very bleak across Europe.
UK banks must raise 38 billion dollars to make up for a capital shortfall,the Bank of England says.
London remains the world's top financial centre,says the Global Financial Centres Index.
VTB has the most exposure to Cyprus of the Russian banks,according to Standard and Poor's.The EU says the Cypriot bank tax is not a template for future bailouts.
Credit Suisse is to buy Morgan Stanley's Europe wealth management business.Erricson is in talks to buy Microsoft's IPTV business.
The euro has traded below 1.28 for the first time since November.
German plant and machine orders were unchanged in February on weak Euro-zone demand.
Credit Suisse(CS),Microsoft(MSFT),Morgan Stanley(MS),Erricson(ERIC)

Osborn Decries Debt

George Osborn,the Conservative party's Shadow Chancellor of the Exchequer,its chief financial expert,has bitterly criticized British Prime Minister Gordon Brown's response to the financial crisis.Borrowing is out of control,,Mr.Osborn complained,mounting up massive national debt.Interest rates should be slashed.There's plenty of scope to stimulate demand with lower rates.We were already in pretty bad shape coming into this downturn,reducing our room for maneuver.We're in for a very difficult time and a recession.Government needs to be there to help.Monetary policy is the best tool,Mr.Osborn believes.The Bank of England and the European Central Bank will make interest rate decisions on Thursday.

Euro-zone Assessment

Alex Patelis of Merrill Lynch(MER) says the Bank of England's new lending facility for banks is unprecedented.It is remarkable that they established it after having warned of the moral hazard of such a move.Mr.Patelis is relatively positive about the Euro-zone.In the Euro-zone,homes are not as important in financing.The English-speaking countries are more dependent on housing for that purpose.While the Bank of England will have to cut interest rates twice more this year,the European Central Bank is on hold for the foreseeable future,in Mr.Patelis' view.Euro-zone inflation for March was at 3.6%,so the ECB is quite reluctant to risk any increase of it by cutting rates.

Bank of England Helps Banks

The Bank of England has set up a new lending facility for banks.British banks will now be able to swap their mortgage-backed securities for treasury bonds.The facility is similar to one established by the U.S. Federal Reserve.The banks will be able to keep the bonds for up to three years.At that point,the swap will be reversed.The BOE is providing 50 billion pounds for the facility-that is about 100 million dollars U.S..Even if the banks' securities were based on good mortgages,they are viewed with suspicion in the current environment.If they couldn't swap them for treasury bonds,they might have to write them down as a loss.