Jean-Pierre Danthine, (2017), “Leverage and limited liability: A toxic cocktail”, 21 Νovember There is little debate that one of the main causes of the Global Crisis was excessive risk-taking by large international financial institutions. Most observers would also agree that much has been accomplished under Basel III to address the problem. Banks today are required to have more and better equity capital, they are required to prepare ‘recovery and resolution …Read More

Marcello Minenna, (2017), “ECB, Greece And The Ticking NPL Time-Bomb”, Social Europe, 22 November After the ECB regulatory tightening on banks’ non-performing loans (NPLs), announced with the well-known “addendum” to its guidance to banks of October 5, a barrage of anger came from the Italian banks and institutions (even the Minister of Economy Pier Carlo Padoan and the Bank of Italy took a stand) to defend the threatened stability of …Read More

Philippe Legrain, (2017), “The Twilight of Angela Merkel”, Project Syndicate, 21 Νovember While Angela Merkel’s departure may not be imminent, her power is leaching away. With Germany set to turn further inward as it struggles to form a new government – and possibly heads to another federal election next year – a hole has emerged at the heart of Europe, and France’s president, Emmanuel Macron, will not be able to …Read More

Silvia Merler, (2017), “Has the Phillips curve disappeared?”, Bruegel, 21 Νovember The Economist argues that the Phillips curve may be broken for good, showing a chart of average inflation and cyclical unemployment for advanced economies, which has flattened over time (Figure 1). The Economist also refers to a recent paper by three economists at the Philadelphia Fed, arguing that the Phillips curve is not very useful at forecasting inflation: their …Read More

Ferdinando Giugliano, (2017), “Dear EU: There’s More to Europe Than Paris and Amsterdam”, BloombergView, 22 Νovember Τhe European Banking Authority and the European Medical Agency will leave London and relocate, respectively, to Paris and Amsterdam. There was the usual ferocious lobbying, but ultimately the choice was open and transparent; it just wasn’t particularly clever. The EU could have been more strategic about its future. Relevant Posts Dirk Schoenmaker, Nicolas Veron, …Read More

Dani Rodrik, (2017), “Rescuing Economics From Neoliberalism”, Social Europe, 17 November As even its harshest critics concede, neoliberalism is hard to pin down. In broad terms, it denotes a preference for markets over government, economic incentives over social or cultural norms, and private entrepreneurship over collective or community action. It has been used to describe a wide range of phenomena—from Augusto Pinochet to Margaret Thatcher and Ronald Reagan, from the …Read More

Sami Ben Naceur, Caroline Roulet, (2017), “Basel III and Bank-Lending: Evidence from the United States and Europe”, IMF Working Paper No.17/245, 15 November Using data on commercial banks in the United States and Europe, this paper analyses the impact of the new Basel III capital and liquidity regulation on bank-lending following the 2008 financial crisis. We find that U.S. banks reinforce their risk absorption capacities when expanding their credit activities. …Read More