Cukierman, Alex, (2016), “Global Crisis in the US vs the Eurozone: Banks and monetary policy”, VoxEu, 16 Απριλίου
Although it started in the US, the Global Crisis had non-negligible repercussions in Europe as well due to substantial purchases of subprime securities by European banks and financial institutions. Those problems were subsequently amplified by European sovereign debt crises experienced by countries with weak fiscal institutions. Both the Fed and the ECB reacted to their respective crises by injecting liquidity and generally loosening monetary policy. But due to structural and institutional differences as well as timing differences between the peaks of the US subprime crisis and the Eurozone sovereign debt crisis, there are noticeable differences between the policy responses of the Fed and the ECB. This column compares the behaviour of banking credit and banks’ reserves following major crisis triggers in the US and the Eurozone. Although the downfall of Lehman Brothers constitutes such a trigger for both the US and Eurozone, the latter was hit only by the blast waves of that event. An important, internally generated crisis trigger in the Eurozone was the November 2009 announcement by Greek Prime Minister George Papandreou that Greece’s annual budget deficit will be more than double the previously announced figure (Rebooting Consensus authors 2015). For the US, Lehman’s downfall obviously constitutes a clear watershed. Although it was affected by both events, the impact of the EZ crisis was stronger in Europe than Lehman’s collapse.
Σχετικές αναρτήσεις
- Roubini, Nouriel, (2016), “Unconventional Monetary Policy On Stilts”, Social Europe, 5 Απριλίου
- Fratzscher, Marcel, Rieth, Malte, (2015), “Monetary Policy, Bank Bailouts and the Sovereign-bank Risk Nexus in the Euro Area”, European Commission Directorate-General for Economic and Financial Affairs, DISCUSSION PAPER 009, Σεπτέμβριος 2015