Clayes, Gregory, Efstathiou, Konstantinos, (2017), “Is the recent increase in long-term interest rates a threat to euro-area recovery?”, Bruegel, 29 Μαΐου After reaching historically low levels in the first half of 2016, European long-term sovereign yields experienced a notable increase in the second half of 2016 and at the beginning of 2017, before stabilising in the last few months. The nominal long-term interest rate can be decomposed into the following components: …Read More
Bank bail-in: The effects on credit supply and real economy
Beck, Thorsten, Samuel Da-Rocha-Lopes, Samuel, Silva, Andre, (2017), “Bank bail-in: The effects on credit supply and real economy”, VoxEU, 26 Μαΐου The new resolution and bail-in regime in Europe hypothetically lets banks fail without resorting to public funding. This column examines the effects of the bail-in of the Portuguese Banco Espírito Santo. Existing borrowers from the banks exposed to the bail-in experienced a negative impact on their credit supply from …Read More
Bank resolution: The importance of a public backstop
Cecchetti, Stephen, Schoenholtz, Kim, (2017), “Bank resolution: The importance of a public backstop”, Vox Eu, 28 Μαΐου 2017 The failure of Lehman on 15 September 2008, signalled the most intense phase of the Global Crisis of 2007-2009, fuelling a run on a broad array of intermediaries. Following Congress’ approval of the Troubled Asset Relief Program (TARP) funding that was used mostly to recapitalise US financial firms, the mantra of US regulators became …Read More
How Portugal’s leaders exploited the bail out to pass measures they already supported
Moury, Catherine, Standring, Adam, (2017), “How Portugal’s leaders exploited the bail out to pass measures they already supported”, EUROPP, Μάιος We recently conducted both an analysis of official statements and interviews with many of the main political actors that were in power during the sovereign debt crisis in Portugal (2010-2015). Our research highlights that both the crisis and the bailout made the executive stronger in relation to other domestic actors. Consequently, when …Read More
Welfare: Savings not taxation
Douglas, Roger, MacCulloch, Robert, (2017), “Welfare: Savings not taxation”, Vox Eu, 25 Μαΐου Across many countries, the cost of publicly funded healthcare, retirement, and other welfare programmes are forecast to put rising pressure on government budgets. As a result, many nations are seeking to reform their welfare states so that costs to the government can be reduced, quality of outcomes increased, and the plight of low- and middle-income earners improved. Regrettably …Read More
Financial integration in the Eurozone should not be a tough sell
Brosens, Teunis, (2017), “Financial integration in the Eurozone should not be a tough sell”, Vox Eu, 24 Μαΐου Much progress has been made in recent years to improve the financial integration of the Eurozone. Banking union is the most important example. Increasing stability is an important objective. But let us not forget that an integrated financial market also helps European consumers and companies in a more direct way. A fully equipped …Read More
Populism, Austerity And Democratic Deficit
Watt, Andrew, Andor, László, (2017), “Populism, Austerity And Democratic Deficit”, Social Europe, 23 Μαΐου Critiques of the European Union target a political problem – the so-called democratic deficit – and an economic (and social) one: austerity, sometimes subsumed under the broader heading of neoliberalism. It is also often claimed or simply assumed that there is a connection between the two: the first being the main cause of the second. Bureaucrats …Read More
Governance and Ownership of Significant Euro Area Banks
Véron, Nicolas, (2017), “Governance and Ownership of Significant Euro Area Banks”, PIIE, Μάιος European policymakers and analysts often appear to assume that most euro area banks are publicly listed companies with ownership scattered among many institutional investors, a structure in which no single shareholder has controlling influence and that allows for considerable flexibility to raise capital when needed. Such an ownership structure is indeed prevalent among banks in advanced countries such …Read More
Social Europe revisited
Bentolila, Samuel, Dolado , Juan, (2017), “Social Europe revisited”, Vox Eu, 23 Μαΐου Almost 20 years ago, the eighth CEPR Monitoring European Integration report explored the interactions between social policy, broadly interpreted, and economic integration in Europe. The experience of the past enlargement of the European Community to include Greece, Portugal, and Spain from the early to the mid-1980s provided Social Europe: One for All? (Bean, Bentolila, Bertola, and Dolado, 1998) …Read More
Does employment protection legislation affect credit access? Evidence from Europe
Moro, Andrea, Maresch, Daniela, Ferrando, Annalisa, Udell, Gregory F., (2017), “Does employment protection legislation affect credit access? Evidence from Europe”, ECB, Μάιος We investigate the impact of employment protection on firms’ credit access by looking at both credit obtained from banks and firms’ decision to apply for a loan. We find that greater flexibility in structuring the employees’ working hours and in dismissing employees increases the probability that firms obtain …Read More