Camba-Mendez, Gonzalo, Durré, Alain, Mongelli, Francesco Paolo , (2016), “Bank interest rate setting in the euro area during the Great Recession”, ECB Working Paper Series, 16 September This paper sheds light on how recent financial tensions in the euro area were ultimately reflected in bank interest rate setting. We make two new contributions. First, we develop a theoretical model capturing banks financing and the rate setting choices. Banks in the model …Read More

Kincaid, G. Russell, (2016), “Different lessons For Europe from American financial history–a counterpoint to Mr. Gaspar”, Journal of European Integration, 2 September Sovereign debt restructuring played a key role in placing the US federal government on a sound financial footing under its new Constitution in 1789. State governments in the US, like national governments in the euro area, do not have bankruptcy protection. US state governments have not defaulted since the …Read More

Wyplosz, Charles, (2016), “The six flaws of the Eurozone”, Economic Policy, 4 August When it was created, it was reasonable to think that the architecture of the monetary union was not perfect. It was also likely that the imperfections would lead to difficulties, possibly even crises. This article identifies six flaws, most of which had been identified even before the launch of the euro. It starts by pinpointing why the Eurozone, …Read More

Andrade, Philippe, Breckenfelder, Johannes, De Fiore, Fiorella, Karadi, Peter, Tristani, Oreste, (2016),  “The ECB’s asset purchase programme: an early assessment”, ECB Working Paper Series, 9 September This paper analyses the effects of the European Central Bank’s expanded asset purchase programme (APP) on yields and on the macroeconomy, and sheds some light on its transmission channels. It shows, first, that the January 2015 announcement of the programme has significantly and persistently reduced …Read More

S. Blattner, Tobias. A. S. Joyce, Michael, (2016), “Net debt supply shocks in the euro area and the implications for QE”, ECB Working Paper Series, 9 September This paper examines how shocks to the net supply of government bonds affect the euro area term structure of interest rates and the wider macroeconomy. To measure net debt supply we construct a new free-float measure, which adjusts total government debt of the four largest euro …Read More