Fuest, C., Heinemann, F. & Schröder, C. (2014) “A Viable Insolvency Procedure for Sovereigns (VIPS) in the Euro Area“, Centre for European Economic Research (ZEW), Discussion Paper No. 14, Αύγουστος.
The euro area debt crisis has revealed serious flaws in the institutional setup of the European Monetary Union (EMU) as it had been designed in the late 1990s (Buti and Carnot, 2012; Hodson, 2013). Although the establishment of a common currency was a step towards more integration of financial and banking markets, supervision remained national. Although the common currency inherently had increased the fragility of government bond markets for self-fulfilling default expectations (De Grauwe and Ji, 2012), no lender of last resort has been identified. And although one member’s unsustainable fiscal policy implies high costs for all countries of a currency area, national budgetary decisions had been left effectively unconstrained.
Σχετικές αναρτήσεις:
- Mody, A. (2014) “The OMT’s fragile foundations“, VoxEU Organisation, 09 Σεπτεμβρίου.
- Korte, J. & Steffen, S. (2014) “A ‘sovereign subsidy’ – zero risk weights and sovereign risk spillovers“, VoxEU Organisation, 07 Σεπτεμβρίου.
- Jordà,O., Schularick, M. & Taylor, A. (2013) “Sovereigns versus banks: Crises, causes and consequences“, VoxEU Organisation, 18 Οκτωβρίου.