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32. The global crisis: Have we learned the right lessons?
- Author:
- György Surányi
- Publication Date:
- 03-2012
- Content Type:
- Policy Brief
- Institution:
- Center for Social and Economic Research - CASE
- Abstract:
- The global crisis, which was the worst economic and financial downturn since the Great Depression, revealed the fundamental deficiencies in the global financial system and drastically changed the way we view the world and the global financial system. The crisis challenged long-standing views and ideas, and in response, after the most acute phase of the crisis, joint global efforts were launched to put the system on firm footing again and prevent the next crisis. These efforts can only be successful if we fully understand the root causes of the crisis and learn the right lessons from it. In his E-brief Dr. György Surányi focuses on four topics: regulation, external position, monetary policy and the European debt crisis. This E-brief is based on Dr György Surányi’s presentation at the CASE 2011 International Conference on Europe 2000: Exploring the Future of European Integration held on November 18-19, 2011.
- Topic:
- Debt, Monetary Policy, Regulation, and Economic Crisis
- Political Geography:
- Europe
33. The need for contingency planning: potential scenarios of Eurozone disintegration
- Author:
- Marek Dabrowski
- Publication Date:
- 06-2012
- Content Type:
- Policy Brief
- Institution:
- Center for Social and Economic Research - CASE
- Abstract:
- Since the beginning of 2010, the common currency area in Europe found itself under serious strain as a consequence of the sovereign debt crisis in several member states. While a substantial political and financial effort has been made to avoid a collapse of the Euro project, its ultimate outcome remains uncertain due to continuous financial market pressures and political challenges faced by individual member states. Therefore, one cannot entirely rule out the possibility of either a partial or total breakup of the Eurozone, even if such a demise would bring about disastrous economic and political consequences for the entire EU and its external partners.
- Topic:
- Debt, European Union, Economic Policy, Macroeconomics, and Eurozone
- Political Geography:
- Europe
34. Bringing Stability to Europe: Why Europe needs a banking union
- Author:
- Erik Jones
- Publication Date:
- 11-2012
- Content Type:
- Policy Brief
- Institution:
- Finnish Institute of International Affairs (FIIA)
- Abstract:
- The European sovereign debt crisis is the result of capital flows across the single market. The danger that such capital flows could unleash market speculation was known from the start; indeed, the single currency was created to remove the threat of exchange rate instability. The problem is that the architects of the single currency did not consider the impact of capital market integration on the banking sector or on the relationship between banks and national governments. Once markets lost confidence in the security of their cross-border investments, investors began to pull back their capital and the internal market for financial services started to disintegrate. The creation of a banking union is part of the solution. However, the euro area also needs a common 'risk-free' asset to use as a safe haven in times of crisis.
- Topic:
- Debt, Economics, Markets, and Financial Crisis
- Political Geography:
- Europe
35. Oil Exporters to the Euro's Rescue?
- Author:
- Philip K. Verleger
- Publication Date:
- 12-2011
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- When a boat springs a leak far from shore, it is customary for all hands to man the pumps—be they friends or enemies, passengers or crew. Every individual's survival depends on the actions of his or her compatriots. So it is with the global economy today.
- Topic:
- Debt, Markets, Oil, International Monetary Fund, and Financial Crisis
- Political Geography:
- Europe
36. External versus Domestic Debt in the Euro Crisis
- Author:
- Daniel Gros
- Publication Date:
- 05-2011
- Content Type:
- Policy Brief
- Institution:
- Centre for European Policy Studies (CEPS)
- Abstract:
- As EU leaders muddle through the eurozone crisis, the debate about its root causes continues. CEPS Director Daniel Gros argues in this Policy Brief that the debate is important if we are to understand how to prevent future crises. In his view, external debt is the key to the turmoil in European economies and that the focus on total public debt is therefore misleading.
- Topic:
- Debt, Economics, and Financial Crisis
- Political Geography:
- Europe
37. The EU's Response to the Financial Crisis: A mid-term review
- Author:
- Karel Lannoo
- Publication Date:
- 04-2011
- Content Type:
- Policy Brief
- Institution:
- Centre for European Policy Studies (CEPS)
- Abstract:
- Two years after the London G-20, CEPS Chief Executive Karel Lannoo finds that the EU is well advanced in delivering on the commitments made for the 2013 target date. Important steps have been taken on the institutional side, and regulatory changes are moving ahead. On some issues, in fact, such as remuneration, the EU has made even greater headway than the US. But certain key sensitive matters remain, such as bank resolution or structural changes.
- Topic:
- Debt, Economics, Global Recession, Monetary Policy, and Financial Crisis
- Political Geography:
- United States, Europe, and London
38. Can the eurozone countries still live together happily ever after?
- Author:
- Marcello Messori
- Publication Date:
- 03-2011
- Content Type:
- Policy Brief
- Institution:
- Centre for European Policy Studies (CEPS)
- Abstract:
- After the Greek public debt crisis and the bilateral loans to Greece from the other members of the European Monetary Union (EMU), in May 2010 the Ecofin Council launched the European Financial Stabilization Mechanism (EFSM). In June of the same year the EMU countries instituted the European Financial Stability Facility (EFSF). These two mechanisms, which are charged with providing support to EMU countries in “exceptional difficulty”, received their baptism of fire with Ireland in January 2011 and successfully made their first bond issue on the market.
- Topic:
- Debt, Economics, and Monetary Policy
- Political Geography:
- Europe and Greece
39. Restoring financial stability in the euro area
- Author:
- Christian Kopf
- Publication Date:
- 03-2011
- Content Type:
- Policy Brief
- Institution:
- Centre for European Policy Studies (CEPS)
- Abstract:
- The pricing of sovereign credit risk is a necessary component of the financial architecture of the European Monetary Union. However, unnecessarily high and volatile risk premia on government bonds are currently preventing effective financial intermediation within the euro area, thereby inhibiting its economic recovery. Several proposals have been made on how these risk premia should be brought down, namely i) permanent pooling of funding through joint bond issuance, ii) temporary liquidity assistance through multilateral funds, iii) debt buybacks using multilateral funds, and iv) debt restructuring.
- Topic:
- Debt, Economics, Global Recession, Monetary Policy, and Financial Crisis
- Political Geography:
- Europe
40. Debt reduction without default?
- Author:
- Daniel Gros and Thomas Mayer
- Publication Date:
- 02-2011
- Content Type:
- Policy Brief
- Institution:
- Centre for European Policy Studies (CEPS)
- Abstract:
- This paper proposes a two-step, market-based approach to debt reduction: · Step 1.The European Financial Stability Facility (EFSF) would offer holders of debt of the countries with an EFSF programme (probably Greece, Ireland and Portugal = GIP) an exchange into EFSF paper at the market price prior to their entry into an EFSF-funded programme. The offer would be valid for 90 days. Banks would be forced in the context of the ongoing stress tests to write down even their banking book and thus would have an incentive to accept the offer. · Step 2. Once the EFSF had acquired most of the GIP debt, it would assess debt sustainability country by country. a) If the market price discount at which it acquired the bonds is enough to ensure sustainability, the EFSF will write down the nominal value of its claims to this amount, provided the country agrees to additional adjustment efforts (and, in some cases, asset sales). b) If under a central scenario this discount is not enough to ensure sustainability, the EFSF might agree on a lower interest rate, but with GDP warrants to participate in the upside.
- Topic:
- Debt, Monetary Policy, and Financial Crisis
- Political Geography:
- Europe