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A look at the Basel rules and adequate capital reserves for banks in a crisis.

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ECB president, Mario Draghi, is interviewed at his office in Frankfurt by the Wall Street Journal's Blackstone, Karnitschnig, and Thomson. Draghi quotes economist Rudi Dornbusch, who told him in the old days that the Europeans were rich enough to afford paying for it if everybody didn't work. Draghi, was head of the Bank of Italy, before becoming president of the ECB. He is acutely aware of the problems faced by Italy and other countries like Spain which have let labor markets become rigid, with extensive job protections and generous benefits for the unemployed. The result is that employers are reluctant to hire and young people face high unemployment rates- as high as 50% in Spain. For this reason Draghi sees the old social model in Europe as obsolete and already out. Draghi's sees austerity measures and spending cuts with the structural changes underway in Spain, Italy and other countries as the only way to generate economic renewal. On the Long Term Financing Operation launched by the ECB in Dec. 2011, Draghi says there was agreement within the ECB and the decision was unanimous. He makes it one of his objectives to achieve as much consensus as he can, to do what is right for Europe and to do it together with his colleagues in the ECB and the EU. That financing operation, and the binding deficit controls achieved at a recent summit of European leaders, he sees as all part of the pathway to fiscal union. ...

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Portugal's parliament gave preliminary approval to a new budget bill with 4.3 billion euros in tax increases on income, captal gains, property and car ownership, and 1 billion euros in spending cuts compared to the 2012 budget. Banco Espirito Santo was able to sell 750 million euros in 3 year bonds with an interest rate of 5.875%. Over 200 investors from France, UK, Germany made buying offers of more than 2.7 billion euros. The rate is lower than expected and reflects ECB policy support for bond markets of countries requesting aid.

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Landon Thomas Jr. asks the question now on the minds of many bankers in the City of London- did the conditions British prime minister present to the EU leaders at the summit on Dec 9, 2011, help or hurt the City of London and Britain's financial sector? Will the City now have to deal with rules set by the other 26 countries, with Britain's role in their formulation marginalized.

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The decline in fertility rates in Brazil from 6.1 children per woman in 1960, to less than 1.9 children per woman in 2010, has astounded experts. Especially because this is observed in all parts of Brazil, in poor and affluent areas. The tend is observed throughout Latin America, from Chile and Mexico to Ecuador. The fertility rate in Latin America has declined sharply from about 6 children per woman in 1960, to 2.3 in 2010. The rate in the U.S. is 2.0, which is enough to keep the population at a level where it remains stable.

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Spain's Partido Popular Rajoy government sees concessions to the Syriza government in Greece in difficult EU-Greece negotiations as emboldening a similiar Podemos movement in Spain. It sees this as putting at risk the still fragile economic recovery in Spain. From this point of view it is better for Greece to exit the eurozone, according to Simon Nixon.

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Krugman says the TPP is no big deal because most of the trade in that region is free, protectionism is way down. He cites a recent report on American import restraints by the International Trade Commission putting their total cost at 0.01% of GDP.

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Amar Bhide touches on the unpredictable consequences of devaluations while commenting on the supposed benefit of a country having its own currency vs a currency such as the euro. The euro takes away the advatantage of devaluing the national currency as a way to regain competitiveness. Bhide points out that devaluations hurt the elderly on fixed incomes and low wage workers. Protections have to be put in place for the sections of the population that are badly affected. Large union negotiated wage increases can also reduce the benefits of devaluation in terms of regaining competitiveness.

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Reports that the family and relatives of China's prime minister Wen Jiabao have accumulated assets worth about $2.7 billion.

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Reflecting the volatile nature of the global economy with systemic risks remaining, impact of sharp cuts in spending, and the danger of oil prices exceeding $150 with a mideast crisis, the IMF provided a wide range of possibilities around its basic forecast. The IMF says it expects the global economy to grow 3.5% in 2012, up 0.2% from a Jan. forecast, and a forecast of 4.1% for 2013. But the IMF says this depends on the eurozone crisis, which could take off 2% from global output and 3.5% from output in the eurozone if things went wrong in Europe. Higher oil prices above $165 with supply disruptions after Iranian sanctions are another danger. Its forecast for Europe is 0.3% contraction in 2012 and 0.9% growth in 2013. Because of the risks in the outlook the IMF cautions countries from cutting spending too quickly, and says the best approach is to reduce deficits gradually over the long term and not to move too fast in the short term. This word of caution applies to Spain, the UK, France and Germany. To maintain enough funding in a crisis the IMF plans to increase its lending capacity from $380 billion by an additional $280 billion, with pledges of $60 billion from Japan, $26 billion from the Nordic countries, and $200 from other eurozone countries. ...

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Mike McNamara, CEO of Flextronics, on the increasing competitiveness of U.S. manufacturing and the return of manufacturing jobs to the U.S.

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ECB president Mario Draghi tells a newsconference on April 14, 2015, that the bond buying program is "proceeding smoothly." He said that he does not see scarcity in the bond market. The ECB plans to continue its purchases of government bonds and other debt at a rate of 60 billion euros a month through September 2016. He said the program of very low interest rates for a very long time "is fertile terrain for financial instability imbalances," but he did not see evidence of systemically large financial imbalances at this time. The ECB approach would be to tackle the risks by using its power as a bank regulator, not by changing monetary policy, said Draghi. He was optimistic about the initial results, saying "more accomodative monetary policy is being translated into better credit conditions, which is something we have not seen before." The euro is down to $1.06 and low oil prices have helped improve economic conditions, as well as ongoing structural reforms pushed by the EU and ECB. Draghi's forecast for economic growth in the eurozone is now up from 1% to 1.5% for 2015....

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Renewed calls for higher capital reserves by banking regulators and Britain's Independent Banking Commission after $2 billion in losses at UBS. The losses were a result of derivatives trades made at UBS's London trading desk.

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Financial problems at Banca Monte dei Paschi di Siena and the Italian government's role has introduced an element of uncertainty in the upcoming election in Italy. This has helped former prime minister Silvio Berlusconi recover in the polls. In Spain the newspaper El Pais published information from the ruling Partido Popular financial records showing hidden payments of 25,200 euros a year between 1997-2008. The opposition leaders asked for Rajoy's resignation and Rajoy did not address the matter directly till a joint appearence with Merkel in Berlin, where he said: " I have exactly the same strength, the same courage, and I am just as determined to continue as prime minister to overcome one of the most difficult situations in Spain of the last 30 years." Rajoy has a solid majority in parliament, with his party firmly behind him. This is unlikely to affect the political situation in Spain.