Welcome to Day 2 of SmartBrief’s roundup of financial news coming out of the World Economic Forum Annual Meeting in Davos, Switzerland. Scroll to the bottom of this post to watch a selection of Thursday’s panel discussions related to finance.
The Lady and the Gentleman: German Chancellor Angela Merkel might have been talking in Davos on Thursday, but everyone was listening to European Central Bank President Mario Draghi. Merkel’s call for Europe to stay the course on structural reforms was drowned out by Draghi announcing the ECB’s plan to inject $1.37 trillion into the Eurozone economy via quantitative easing. USA Today describes how many attendees at Merkel’s speech in Davos became distracted a view minutes in when Draghi’s news was announced.
Yea and Nay on European QE: Morgan Stanley boss James Gorman told Bloomberg News the ECB’s move on quantitative easing is a good thing. But according to CITY A.M., Larry Summers is not sure it is enough. (read more…)
Swiss Franc-enstein: As if Switzerland wasn’t already expensive enough, the Swiss National Bank’s currency move just made it crazy costly. The Telegraph explains why the SNB did it … The Guardian weighs what a Swiss vacation will now cost tourists … and Bloomberg goes high-brow to dissect what it will mean for bar tabs at the upcoming World Economic Forum in Davos.
NYT explains who is that attacking Dodd-Frank: Legislation proposed in the House would reduce transparency in derivatives trading, allow large banks to keep certain risky securities two years longer than now permitted and prevent the Securities and Exchange Commission from regulating private equity firms involved in some securities transactions, writes Gretchen Morgenson.
And Jack Lew says Dodd-Frank should be protected: The Dodd-Frank Act needs protecting, not dismantling, Treasury Secretary Jack Lew writes in the Washington Post. He notes the progress the U.S. economy has made since the financial crisis and credits a substantial part of that to regulatory changes. (read more…)
A collection of stories from SmartBrief publications and around the web…
Politico sheds light on the “real” bank of America: Federal credit programs, including student loans, mortgage guarantees and transportation programs, have expanded over the past decade from $1.3 trillion to $3.2 trillion in outstanding loans. The fast-growing programs lack oversight, regulation and management expertise. “The government is a gigantic financial institution, operating in a black box,” says Deborah Lucas, who runs MIT’s Center for Finance and Policy and previously worked for the Congressional Budget Office.
WSJ goes all FOIA on the NY Fed: The Wall Street Journal issued a Freedom of Information Act request to obtain a copy of the Fed’s Office of Inspector General’s report on its oversight of JPMorgan Chase in the lead up to the London Whale trading fiasco. The report details how the Fed’s overreliance on the bank’s reputation played a role in how it missed the “tempest in a teapot” that was brewing in London. (read more…)
“If we fail to make the investment in our aging transportation infrastructure, our economy will suffer. Our transportation system is the backbone of the economy, and it drives growth in sectors beyond construction.” — Robert Stevens, president of the American Society of Civil Engineers
The amount of money the federal government currently invests each year in state highway, bridge and public transit infrastructure programs — about $50 billion — contributes to the country’s economy in ways that may not be obvious. Each dollar of federal investment in transportation infrastructure adds between $1.82 and $2.00 to the annual gross domestic product in the U.S., according to a report released by IHS Global on Wednesday. It also contributes to about 614,000 jobs and increases household income by an average of $410.
The report was commissioned by the Transportation Construction Coalition – a group of 31 national associations and labor unions that is co-chaired by the Associated General Contractors of America and the American Road & Transportation Builders Association. (read more…)