Financial protectionism: New evidence from bank bailouts

One of the important numbers that banks disclose is something called the net interest margin, often buried deep in quarterly financials. Despite the technical sound of the phrase, it simply refers to the average amount of profit made on loans during the period. The fatter the net interest margin, or NIM, the easier it is for the bank to turn a profit.

BRUSSELS — Throughout Europe’s debt crisis, northern European leaders have often said they will not stand for taxpayers having to fork out for other countries’ problems, and the notion of “taxpayer-funded bailouts” has taken root. Yet despite three-and-a-half years of debt and banking turmoil, with bailouts totalling more than 400 billion euros, northern eurozone taxpayers have not actually lost a cent.

The report below comes courtesy of Nouriel Roubini’s team of analysts at RGE.The chef on the Titanic is said to have survived the icy waters by thinning his blood with booze as the band played on. China’s approach to the global financial crisis followed a similar strategy.

Holger Görg, Christiane Krieger-Boden, 9 June 2011The global financial crisis has raised the threat of protectionism. This column argues that the worst offenders will suffer a drop in foreign direct investment inflows. Full Article: Protectionism backfires on FDI

Shimelse Ali, Uri Dadush, Rachel Esplin Odell, 7 June 2011The limited resort to protectionism during the financial crisis is often attributed to the WTO or to sensible macroeconomic policy. This column argues that there is more to the story. The combination of national laws, regional agreements, and powerful interest groups has worked to stop protectionism in its tracks. Full Article: Is protectionism dying?

The chart shows the total percent of delinquent loans by commercial banks in the USA.

The chart shows the total percent of delinquent loans by commercial banks in the USA.