Short news

Will the European Central Bank turn to Quantitative Easing ? This is the question haunting all analysts and governments and, if one were to make a bet, better put it on the YES answer. Yes, the ECB will most probably end up doing just what the FED has been doing for years. The main reasons put forward in support of that policy is that there is no much choice: no one wants to lend to EU states and EU banks any more, not even the Chinese government, and the German economy doesn't have the power to support everyone.

In one of the first studies critically to examine the Basel Accords, Engineering the Financial Crisis reveals the crucial role that bank capital requirements and other government regulations played in the recent financial crisis. Jeffrey Friedman and Wladimir Kraus argue that by encouraging banks to invest in highly rated mortgage-backed bonds, the Basel Accords created an overconcentration of risk in the banking industry.

French richest woman Liliane Bettencourt has been caught up by the fiscal authorities for tax avoidance. Mrs Bettencourt, they reveal, has an offshore bank accounts and acquired hiddenly an island on the Seychelles. She will now have to pay some additional €108 million to the State. Given her recent claims in support of higher taxation for the rich, she is probably more than happy with this adjustment.

William A. Niskanen, chairman emeritus and a distinguished senior economist at the Cato Institute, has died at the age of 78. Niskanen was the chairman of the Cato Institute for 23 years, following service as a member and acting chairman of President Reagan's Council of Economic Advisers. Niskanen also served as director of economics at the Ford Motor Company, professor of economics at the University of California at Berkeley and Los Angeles, and assistant director of the Office of Management and Budget. He was a world-renowned economist and a passionate leader of the growing classical liberal movement around the globe.

An excellent report published by the Finnish think-tank Libera Foundation offers a novel historical perspective on the development of the Swedish economy.Contrary to the commonly- held view, this report is explaining the success of the Swedish model is not due to the Welfare State. Rather, it is a Johny-come-lately: expansion of public welfare started only around 1970. By 1985, taxes exceeded 50% of GDP and by the mid 1990's Sweden had dropped from one of the top positions to a mid-level rank in terms of wealth and economic growth.