Maria Demertzis, Inês Goncalves Raposo, Pia Hüttl and Guntram B. Wolff, (2018), “How to provide liquidity to banks after resolution in Europe’s banking union”, European Parliament, Committee on Economic and Monetary Affaris, 22 Νοεμβρίου When banks are deemed to be ‘failing or likely to fail’ in the European Union’s banking union, they are either put into insolvency/liquidation or enter a ‘resolution scheme’. The Single Supervisory Mechanism (SSM) typically decides that a bank …Read More
Pockets of risk in European housing markets
Jane Kelly, Julia Le Blanc, Reamonn Lydon, (2018), “Pockets of risk in European housing markets”, VoxEU, 25 Νοεμβρίου Loan-to-value limits and other borrower-based macroprudential measures are now used in two-thirds of advanced economies. This column uses survey data to document changes in credit standards in a cross-section of countries in the run-up to, and aftermath of, the financial crisis. There is clear evidence of laxer credit standards in countries that …Read More
Italy’s Populists Aren’t the Only Ones to Blame
Ferdinando Giugliano, (2018), “Italy’s Populists Aren’t the Only Ones to Blame”, Bloomberg Opinion, 26 Νοεμβρίου Italy was allowed to join the euro in May 1998 even though its public debt stood just below 120 per cent of gross domestic product. The so-called “Maastrich criteria” – which EU members must meet to enter the single currency – stated that government debt shouldn’t exceed 60 per cent of GDP. Failing that, the ratio should …Read More
When left-leaning parties support austerity, their voters start to embrace the far right
Maria Snegovaya, (2018), “When left-leaning parties support austerity, their voters start to embrace the far right”, Washington Post, 20 Νοεμβρίου Recently, former White House adviser Anthony Scaramucci declared that President Trump is a “blue-collar president” — which some observers find curious, given his wealthy upbringing and boasts about being a billionaire. And in Sweden’s general election in September, the far-right Sweden Democrats finished in third place with 18 percent of the …Read More
A monetary policy framework for the European Central Bank to deal with uncertainty
Gregory Claeys, Maria Demertzis and Jan Mazzaa, (2018), “Monetary policy framework for the European Central Bank to deal with uncertainty”, Bruegel, 22 Νοεμβρίου Central banks face new challenges. First, the potential long-term decline in neutral rates of interest in advanced economies could reduce the space for central banks to make policy-rate cuts. Second, the potential flattening of the Phillips curve (i.e. the weakening of the relationship between inflation and unemployment) in recent …Read More
Greece’s slow reforms may delay return of bond profits – sources
Papadimas Lefteris, (2018), “Greece’s slow reforms may delay return of bond profits – sources”, Reuters, 20 Νοεμβρίου Athens, Nov 20 (Reuters) – Greece is at risk of missing a first tranche of ECB profit returns on Greek bond holdings due to delays in the pace of privatisations despite over-performance on its fiscal targets, sources told Reuters on Tuesday. About 4.8 billion euros ($5.48 billion) of profits from Greek bonds held by …Read More
Impact of Italy’s Draft Budget on Growth and Fiscal Solvency
Olivier Blanchard, Álvaro Leandro, Silvia Merler and Jeromin Zettelmeyer, (2018), “Impact of Italy’s Draft Budget on Growth and Fiscal Solvency”, Peterson Institute for International Economics, Policy Brief 18-24, Νοέμβριος A bitter standoff is under way between Italy’s new government and the European Commission over the Commission’s objections to Italy’s proposed expansionary budget for 2019. In this Policy Brief, the authors look at the merits of fiscal expansion, concluding that Italy’s …Read More
Euro Area Paves the Way for Easier Sovereign Debt Restructurings
Nikos Chrysoloras and Viktoria Dendrinou, (2018), “Euro Area Paves the Way for Easier Sovereign Debt Restructurings”, Bloomberg, 19 Νοεμβρίου A proposal to simplify euro-area sovereign debt restructurings has gained broad support among members of the common currency, Portuguese Finance Minister Mario Centeno said, as governments move to bolster its tools after the last credit crisis nearly tore the 19-nation bloc apart. The plan envisages strengthening collective action clauses, which have been mandatory …Read More
The ECB should extend its bond-buying programme
Melvyn Krauss, (2018), “The ECB should extend its bond-buying programme”, Financial Times, 18 Νοεμβρίου The European Central Bank is signalling that it intends to end its €2.5tn quantitative easing programme next month. Mario Draghi, ECB president, made that clear at the bank’s monthly meeting in October. Yet the recent eurozone growth numbers were the weakest since 2014. The danger for the ECB is that it will have to start QE up again …Read More
Migration Into Europe: A Long-Term Solution?
Branko Milanovic, (2018), “Migration Into Europe: A Long-Term Solution?”, Social Europe, 19 Νοεμβρίου Thus, Europe faces a long-term issue and the following dilemma. As we just saw, if there is globalization and countries involved in globalization have highly uneven incomes, there must be migration. You can stop migration only if you give up on globalization by closing off national borders, or help emitting countries get as rich as Western Europe. The …Read More