December 2016: Middle Eastern housing finance study. Olivier Hassler, and I analyzed the sector in Lebanon, Jordan, Palestine, Egypt, Tunisia and Morocco. 

Additionally I have finished a paper on European mortgage debt restructuring reviewing the Hungarian, Irish and Spanish cases that is currently under review and being published shortly.

The German Ministry of Justice has appointed me as an independent to a working group to evaluate potential Germany law changes regarding the consumer's right of early repayment of mortgage loans and prepayment indemnity formulation in Germany. See my 2014 internationally comparative study (in German). The EU Mortgage Credit Directive had left this field almost unregulated, see my November 2015 Korea PPT below.

July 2016: several comments and interviews published recently in Deutsche Wirtschaftsnachrichten on European banking sector issues (in German):

- Interview on the inflationary use of bad banks in Europe as bank recovery tool, most recently encouraged by the ECB in the context of concerns about Italian banks' high levels of non-performing assets. Bad banks are the result of an asset swap at predetermined prices of dubious against good assets. Investors in dubious assets during the European banking crisis have been either government (Germany, Ireland) or highly subsidized private investors (Spain). Yet, dubious asset prices are near impossible to determine in crisis situations. The approach has therefore often led to redistributions of losses from existing bank equity and debt owners to government. The EU Commission reacted in 2013 by imposing tight State Aid rules, demanding the bail-in at least of junior debt investors, which also apply to the bad bank instrument. 

Italy is currently circumventing those - useful - rules by creating a nominally majority private investor (Atlante vehicle) through regulatory arbitrage favoring their sub-investors, Italian banks and institutions. The goal is to avoid bail-in esp. in Banca Monte dei Paschi di Siena (BMPS), a bank that sold large amounts of subordinated debt to retail investors.

Clearly the better approach, esp. for deeply insolvent banks like BMPS, would be the Good bank approach where dubious assets are left with historic equity and subordinated debt to be unwound while deposits and senior bonds are sold together with good assets. For good assets even in crisis there will be a reasonably competitive bidding process, as the experiences of the US FDIC with hundreds of such resolutions annually during the crisis show, and no need for additional tricks that will undermine both investor and taxpayer confidence.

- Comment on the Slovenian case, in which Swedish advisors during 2012 created a bad bank that served to rescue large amounts of subordinated debt in Novo Ljubljanska Banka (NLB) and other Slovenian banks, e.g. through liability management exercises. I put a slide on NLB in a 2013 presentation (p.9) in Cyprus that highlights the disappearance of bail-inable liabilities. The losses arising from the failure to bail-in even subordinated debt had to be borne by Slovenian taxpayers.

- Interview on current Italian banking sector issues and the Italian governments' hostility against bail-in measures. As in Spain during 2007-2012, Italy's delay in restructuring its banks since 2010 put retail investors in line of a potential bail-in while permitting professional bond investors an exit without losses. Retail investors were attracted through favorable tax treatments of bonds compared to deposits, and de-facto served as a lender of last resort for Italian banks in senior unsecured and subordinated bonds during the attack on the system in the fall of 2011.

- Comment  on the European deposit insurance debate, which ignores that the bailout interventions of the ECB left foreign investors off the hook for sharing losses of bank assets and - because ECB is usually better collateralized or even de-facto super senior (Cyprus) - thus maximized the potential losses for the local deposit base. The result in Cyprus, as fmr. Bank of Cyprus CEO Evdokimos Xenophontes has shown, has been a tripling of the loss given default incidence for >100K deposits from 15%  to 45%. But the same increase is of course present for <100K deposits, which, since they are legally protected, then require proportionally larger government rescues. Because of these 'loss condensation policies', in the four large banks in Greece alone, the Greek government sunk 25 billion Euros essentially to protect deposits. That bill might have been halved if foreign investors would not have been bailed out by the ECB. In particular French banking system insider Jean-Claude Trichet helped foreign investors to exit Greek banks and even bought Greek government bonds at 80 cents/EUR from them. Conclusion: in the presence of an ECB that copies foreign investor bailouts performed by the IMF in emerging markets under the 'lender of last resort' disguise and hence increases loss given default incidence for deposits, the proposal for a European deposit insurance scheme based on mutualizing private bank deposit losses is dead on arrival.