Goldstein, M. (2014) “The 2014 EU-wide bank stress test lacks credibility“, VoxEU Organisation, 18 Νοεμβρίου. Results from last month’s EU-wide stress test are reassuring, especially for countries at Europe’s core. This column warns against a rosy interpretation. The test relies on risk-weighted measures of bank capital ratios that have been shown to be less predictive of bank failure than unweighted leverage ratios – a metric already adopted by the …Read More
Europe’s Bonds Are Unyielding
Gilbert, M. (2014) “Europe’s Bonds Are Unyielding“, Bloomberg View–European Economy, 14 Νοεμβρίου. With central bank interest rates at or near zero in many parts of the world, borrowing costs for governments and companies have plunged to record lows. In Europe, corporate bond yields are now so low that it’s hard to see how fixed-income investors will be able to make money. It’s also difficult to imagine that yet more cheap …Read More
Germany’s Secret Credit Addiction
Turner, A. (2014) “Germany’s Secret Credit Addiction“, Project Syndicate, 10 Νοεμβρίου. With recent data showing that German exports fell 5.8% from July to August, and that industrial production shrank by 4%, it has become clear that the country’s unsustainable credit-fueled expansion is ending. But frugal Germans typically do not see it that way. After all, German household and company debt has fallen as a share of GDP for 15 …Read More
New Pact for Europe: Second Report – Towards a New Pact for Europe
Emmanouilidis, Α. J. & Davis, J. (Ed.) New Pact for Europe: Second Report – Towards a New Pact for Europe, A publication of the King Baudouin Foundation, the Bertelsmann Stiftung and the European Policy Centre (EPC), Οκτώβριος 2014. NEW PACT FOR EUROPE – PROJECT DESCRIPTION In 2012, a consortium of 11 European foundations initiated by the King Baudouin Foundation and Bertelsmann Stiftung, and supported by the European Policy …Read More
Was the ECB’s Comprehensive Assessment up to standard?
De Groen, W. P. (2014) “Was the ECB’s Comprehensive Assessment up to standard?“, Centre for European Policy Studies (CEPS), Policy Brief Νο. 325, 10 Νοεμβρίου. The Comprehensive Assessment conducted by the European Central Bank (ECB) represents a considerable step forward in enhancing transparency in euro-area banks’ balance sheets. The most notable progress since the previous European stress test has been the harmonisation of the definition of non-performing loans and …Read More
The case of the disappearing Fiscal Compact
Gros, D. & Alcidi, C. (2014) “The case of the disappearing Fiscal Compact“, Economic Policy – Centre for European Policy Studies (EPC) Commentary, 05 Νοεμβρίου. Following the Commission’s autumn forecast showing that only five euro-area countries exhibit a fiscal balance better than the 0.5% of GDP deficit allowed by the Fiscal Compact, Daniel Gros and Cinzia Alcidi attempt to explain in this new Commentary why there is precious little …Read More
Opinion polling leaves little doubt Podemos could break into the mainstream of Spanish politics at next year’s general election
Kennedy, P. (2014) “Opinion polling leaves little doubt Podemos could break into the mainstream of Spanish politics at next year’s general election“, LSE EUROPP, 12 Νοεμβρίου. Recent opinion polls in Spain have indicated that the left-wing Podemos (‘We Can’) party, which was only formed in January of this year, could gain the largest share of the vote in Spain’s 2015 general election. Paul Kennedy assesses the challenge the party …Read More
Towards a New Industrial Policy for Europe
Dhéret, C. & Morosi, M. with Andrea Frontini, Annika Hedberg and Romain Pardo (2014) “Towards a New Industrial Policy for Europe“, EPC Issue Paper No. 78, 12 Νοεμβρίου. EXECUTIVE SUMMARY Recent policy debates have confirmed that manufacturing forms a key pillar of the industrial sector and of our economy. However, European manufacturing has been in steady decline for decades. This trend, accelerated by the economic and financial crisis, is …Read More
Recent slowdown in global trade: Cyclical or structural
Boz, Ε., Bussière, Μ. & Marsilli, C. (2014) “Recent slowdown in global trade: Cyclical or structural“, VoxEU Organisation, 12 Νοεμβρίου. The past three years have witnessed a slowdown in global trade. This column shows that the slowdown was particularly pronounced in advanced economies, especially the Eurozone. In a panel of 18 OECD economies, most of the slowdown can be explained by cyclical factors. However, structural factors – global …Read More
Contagion in the European sovereign debt crisis
Glover, B. & Richards-Shubik, S. (2014) “Contagion in the European sovereign debt crisis“, VoxEU Organisation, 12 Νοεμβρίου. Understanding the probability and magnitude of financial contagion is essential for policymaking. This column applies a framework for modelling financial contagion to data on the cross-holding and credit risk of sovereign debt in Europe. Credit markets perceived little risk of contagion from these spillovers following a sovereign default. It is important for …Read More