Mehmet Simsek, the deputy prime minister, tried to dispel fears on Thursday that the country would return to the deep repression seen the last time it was under similar measures. "The state of emergency in Turkey won't include restrictions on movement, gatherings and free press, etc. It isn't martial law of 1990s," he said. "I'm confident Turkey will come out of this with much stronger democracy, better functioning market economy and enhanced investment climate." But as he made his statement, the crackdown spread to journalists and human rights lawyers. Orhan Kemal Cengiz, a leading newspaper columnist and lawyer, was arrested at the airport as he tried to leave the country.  Police also raided the printing house of well-known satirical magazine Le Man...On Thursday, Austria became the first country to take diplomatic action over the crackdown, saying it would summon Turkey's ambassador to discuss Ankara's "increasingly authoritarian" behaviour and allegations it had been behind recent Turkish protests in Vienna. Meanwhile, the UK’s Foreign Affairs Committee said it was to launch an inquiry into Britain’s relations with Turkey and the impact of the crackdown on democracy and human rights.

 Ever since the announcement of the new stress test, in February 2016, the EBA has stated that "passing requirements are not included, because the objective of the test is to use it as a supervision instrument, and the results will be discussed individually with the participating banks, where actions for improving the situation will also be proposed".  The methodology for assessing the solvency as part of the stress test is found on the official website of the EBA, www.eba.europa.eu and should at least engender a minimum of faith among investors when it comes to the banks' abilities to deal with non-performing loans and capitalization deficit. Unfortunately, a general state of "fatigue" seems to have taken place in the Eurozone, amid the waiting in vain for the results promised by the central banks and governments. According to Reuters, amid the disputes between the European and Italian authorities, concerning the initiation of a new bail-out program for Italian banks, but without the prior application of the bail-in procedure, Mario Draghi, the president of the ECB, has expressed his support for the governmental aid offered to Italian banks, because "such a program will allow them to sell some of their non-performing loans, which reduce their lending ability". But is such a "release" of Italian banks' lending capability rational and prudent, when the current volume of non-performing loans shows that they are incapable of correctly evaluating risks?  In the recent meeting of finance ministers of the G20 countries, Pier Carlo Padoan, Italy's finance minister said that "we are going in the right direction and there are no risks when it comes to systemic stability", according to an article in Financial Times. Padoan also rejected the possibility of a bail-in, as he said that such a measure would not be necessary.

The US Federal Reserve’s retreat from four rate rises this year has had a catalytic effect, reviving the fortunes of emerging markets and once again lifting the Sword of Damocles hanging over the heads of those who have borrowed $11 trillion in dollars outside US jurisdiction.

The Fed is in effect acting as the central bank for the whole world, giving a shot in the arm to an international financial system that is has never been so tightly-linked to the dollar or to US borrowing costs – at least since the end of the Gold Standard.  The Japanese are launching a giant fiscal package – in theory 5.7pc of GDP – while France, Italy, and other eurozone states have taken advantage of the Brexit scare to end austerity more quickly than planned and to prime pump their economies. The net effect is double-barrelled monetary and fiscal stimulus across the world probably overwhelms any of the inchoate and mostly political worries stemming from Brexit – at least in the short-term. It is hard to see what can now justify Morgan Stanley’s decision to raise its risk probability of global recession over the next year to 40pc after the referendum.

When oil analysts look at the markets to try to get a sense of where oil prices are heading, one of the great unknowns, at least in the U.S. shale industry, is the large volume of drilled but uncompleted wells (DUCs). As oil prices began collapsing two years ago, shale drillers increasingly decided to defer the completion of their drilled wells, hoping to wait out the downturn and bring production online at a later point when prices rebounded.  But with oil prices suffering from a prolonged downturn, the DUCS began to mount, leaving a huge backlog of potential production that was yet to come online. From the point of view of the nascent and fragile oil price recovery (or more accurately, several cycles of recovery in the past year or so), the DUCs threatened to kill off the price rally, as they would bring a flood of new production online right when prices rose high enough.  However, it appears that the “fracklog” is already getting worked through. According to Bloomberg Intelligence, the number of DUCs stopped rising in the first quarter of this year.

GfK’s latest confidence barometer showed households were more pessimistic about their personal finances and the general economic outlook compared with June, with all five measures of its survey falling sharply this month.  Its headline reading fell to -12 in July, from -1 in June. This represents the biggest monthly drop since March 1990 and is steeper than the decline to -9 recorded by an initial estimate in the first week of July.  Joe Staton, head of market dynamics at GfK, said: “We’ve seen a very significant drop in confidence, as is clear from the fall in each of our key measures.” Mr Staton said the index was still at a “relatively elevated level by historic standards”, and the survey suggested Britons were not yet preparing to stash away more cash into their savings accounts in anticipation of a downturn.  “The future trajectory depends on whether we enter a new period of damaging economic uncertainty or restore confidence by embracing a positive stance on negotiating a new deal for the UK,” said Mr Staton.  GfK’s survey of 2,000 people was conducted in the first two weeks of July, with the poll ending just before Theresa May became prime minister on July 13.

 According to Reuters, amid the disputes between the European and Italian authorities, concerning the initiation of a new bail-out program for Italian banks, but without the prior application of the bail-in procedure, Mario Draghi, the president of the ECB, has expressed his support for the governmental aid offered to Italian banks, because "such a program will allow them to sell some of their non-performing loans, which reduce their lending ability". But is such a "release" of Italian banks' lending capability rational and prudent, when the current volume of non-performing loans shows that they are incapable of correctly evaluating risks?  In the recent meeting of finance ministers of the G20 countries, Pier Carlo Padoan, Italy's finance minister said that "we are going in the right direction and there are no risks when it comes to systemic stability", according to an article in Financial Times. Padoan also rejected the possibility of a bail-in, as he said that such a measure would not be necessary. Shortly after Padoan's statements, shares of the Monte dei Paschi bank saw a new massive drop in Milan, according to Bloomberg, over "concerns over the need for a capital increase". Other information on the web indicates that the Italian authorities already know the results of the stress tests, and that has allowed the finance minister to express his faith in the stability of the banking system in the country.  A completely opposed opinion on the financial stability of the Italian financial system comes from the statements several Italian professors gave Financial Times.   Marcello Messori, a professor at the LUISS University of Rome said that "banks have allocated funds in a distorted and not at all selective manner", while Lorenzo Gai, a finance professor at the University of Florence, estimates that the loan portfolio of the Monte dei Paschi bank represents a "a paradigmatic history of value destruction", as "the management of the loan granting process did not work, and that is an euphemism".  This explains the concerns of the Italian authorities rather well, but 50 billion Euros, the amount of the bail-out program "negotiated" with Brussels, will not be enough.

EU Commission president Jean-Claude Juncker appointed former French commissioner for financial services as chief negotiator in charge of negotiations with the UK. Michel Barnier, a 65-year old former French minister and vice-president in the previous Commission between 2010-14, was in charge of the internal market and services.  He sought the job of EU Commission president in 2014, but the task was later given to Juncker, his rival in the conservative European People's Party.   Barnier said in a tweet that he was “honoured to be entrusted” with the post.  He added: "Rendez-vous for beginning of demanding task on 1 October." His official title will be "chief negotiator in charge of leading the Commission Taskforce for the Preparation and Conduct of the Negotiations with the United Kingdom" under Article 50 of the Lisbon Treaty. The UK has not yet triggered the exit procedure under Article 50, and British prime minister Theresa May suggested it is unlikely the UK will launch the process before the end of the year. Michel Barnier will report directly to Juncker and will have a team of experts at his disposal.  He will be regularly invited to the the meeting of the commissioners to brief the college on the negotiations. Juncker said he wanted "an experienced politician for this difficult job", adding: "Michel is a skilled negotiator with rich experience in major policy areas." Most of the negotiations are nevertheless expected to be done by the council, representing member states.  They will have to navigate through the difficult two-year negotiations and find a balance between the UK's access to the single market in exchange for some level of freedom of movement from and within the bloc.  Barnier's France has been urging for a tough exit deal for Britain, as French president Francois Hollande faces challenge ahead of next year's presidential elections from far-right leader Marine Le Pen, who wants France to hold a referendum on its membership.