Where's all that bank contagion gone?

How far we have travelled.

It is a very telling measure of how far we have travelled down the path to probable Eurozone survival that contagion, and 'bank' contagion specifically, has become much less of a problem. Despite last month’s chaotic, and briefly almost disastrous, Cypriot bank bail-in, and the horribly inconclusive Italian elections in February, there have been virtually no negative consequences for the fortunes of the wider European financial community. A year or so ago either of these events could have been reasonably expected to have raised real fears that queues would form outside banks all over Europe.
An illustration of this is that the Euro Stoxx Banks index is now trading at around 100, the same level as last October, and way above last year’s low of 73.06, seen in July.

The most important reason for this new-found sanguinity is the European Central Bank’s, (ECB), Damascene conversion under Draghi from Trichet’s Bundesbank poodle to a central bank which is focused on the needs of all seventeen states in the union, the completion of which was epitomised by Draghi’s Clint Eastwood moment last September when he warned the markets that, 'we'll do whatever it takes, and it will be enough' and announced Outright Monetary Transactions. This virtually guaranteed that Eurozone nations would always have access to liquidity, hence breaking the potentially lethal ‘dance of death’ of over-indebted states and their under-capitalised banks, who are in turn laden down with massive investments in their national governments’ bonds.

Of almost equal significance has been Chancellor Merkel's extraordinarily dexterous performance in persuading her people of the manifold benefits of the Euro, (i.e. it's a highly effective export finance scheme for Germany-who are the ultimate, unchallenged Currency War victors), and therefore that bailing-out profligate southern neighbours is absolutely in Germany's interest. I’m happy to predict that this will continue, and indeed go into hyper-drive after she has won September's elections, (hardly in question in the absence of any credible Euro-sceptic opposition), as she will then feel free of the political imperatives that have thus far prevented her from allowing Germany to acquiesce to the issuance of jointly and severally liable Eurobonds, (with all Eurozone nations, including Germany, equally on the hook), and a proper banking union.

These measures will ultimately save the Euro, for another 5 years, say.

Photograph: Getty Images

Chairman of  Saxo Capital Markets Board

An Honours Graduate from Oxford University, Nick Beecroft has over 30 years of international trading experience within the financial industry, including senior Global Markets roles at Standard Chartered Bank, Deutsche Bank and Citibank. Nick was a member of the Bank of England's Foreign Exchange Joint Standing Committee.

More of his work can be found here.

Dan Kitwood/Getty
Show Hide image

I believe only Yvette Cooper has the breadth of support to beat Jeremy Corbyn

All the recent polling suggests Andy Burnham is losing more votes than anyone else to Jeremy Corbyn, says Diana Johnson MP.

Tom Blenkinsop MP on the New Statesman website today says he is giving his second preference to Andy Burnham as he thinks that Andy has the best chance of beating Jeremy.

This is on the basis that if Yvette goes out first all her second preferences will swing behind Andy, whereas if Andy goes out first then his second preferences, due to the broad alliance he has created behind his campaign, will all or largely switch to the other male candidate, Jeremy.

Let's take a deep breath and try and think through what will be the effect of preferential voting in the Labour leadership.

First of all, it is very difficult to know how second preferences will switch. From my telephone canvassing there is some rather interesting voting going on, but I don't accept that Tom’s analysis is correct. I have certainly picked up growing support for Yvette in recent weeks.

In fact you can argue the reverse of Tom’s analysis is true – Andy has moved further away from the centre and, as a result, his pitch to those like Tom who are supporting Liz first is now narrower. As a result, Yvette is more likely to pick up those second preferences.

Stats from the Yvette For Labour team show Yvette picking up the majority of second preferences from all candidates – from the Progress wing supporting Liz to the softer left fans of Jeremy – and Andy's supporters too. Their figures show many undecideds opting for Yvette as their first preference, as well as others choosing to switch their first preference to Yvette from one of the other candidates. It's for this reason I still believe only Yvette has the breadth of support to beat Jeremy and then to go on to win in 2020.

It's interesting that Andy has not been willing to make it clear that second preferences should go to Yvette or Liz. Yvette has been very clear that she would encourage second preferences to be for Andy or Liz.

Having watched Andy on Sky's Murnaghan show this morning, he categorically states that Labour will not get beyond first base with the electorate at a general election if we are not economically credible and that fundamentally Jeremy's economic plans do not add up. So, I am unsure why Andy is so unwilling to be clear on second preferences.

All the recent polling suggests Andy is losing more votes than anyone else to Jeremy. He trails fourth in London – where a huge proportion of our electorate is based.

So I would urge Tom to reflect more widely on who is best placed to provide the strongest opposition to the Tories, appeal to the widest group of voters and reach out to the communities we need to win back. I believe that this has to be Yvette.

The Newsnight focus group a few days ago showed that Yvette is best placed to win back those former Labour voters we will need in 2020.

Labour will pay a massive price if we ignore this.

Diana Johnson is the Labour MP for Hull North.