EU institutions

Daniel Gros, 27 June 2016

The business of central banks used to be profitable – they issued cash and could invest the proceeds in the assets they liked. This column argues that the ECB has turned the old business model of central banks around. Today, it earns a stream of income on its liabilities, while the returns of an increasing part of its assets go to the national central banks. This cannot be a stable arrangement.

Resiliency Authors, 25 June 2016

Britain voted to leave the EU. This is terrible news for the UK, but it is also bad news for the Eurozone. Brexit opens the door to all sorts of shocks, and dangerous political snowball effects. Now is the time to shore up the Eurozone’s resiliency. The situation is not yet dire, but prompt action is needed. This VoxEU column – which is signed by a wide range of leading economists – identifies what needs to be done soon, and what should also be done but can probably wait if markets are patient. 

Dirk Schoenmaker, Nicolas Véron, 25 June 2016

The new European banking supervision system, the Single Supervisory Mechanism, has been operating since 2014. Based on data analysis, interviews with officials and market participants, and nine country-specific studies, this column argues that the mechanism is broadly effective and, in line with the claim often made by its leading officials, tough and fair. However, there are significant areas for future improvement.

László Kóczy, 20 June 2016

Much of the discussion about Brexit has focused on the UK and has ignored the another party – the European Union. This column examines how the UK leaving the EU would affect the distribution of power among the remaining member states. The larger members such as France and Germany would likely benefit directly from Brexit, at least in terms of power.

Wouter den Haan, Martin Ellison, Ethan Ilzetzki, Michael McMahon, Ricardo Reis, 20 June 2016

This week’s UK referendum on EU membership is likely to have both short- and long-term effects on the country’s financial sector. This column, which reports the views of panel members in the monthly Centre for Macroeconomics survey, finds that almost all think that a vote for Brexit would lead to a significant disruption to financial markets and asset prices for several months, putting the Bank of England on high alert. On top of the risk of a financial crisis in the near future, an unusually strong majority agrees that there would be substantial negative long-term consequences. No panel member expects the overall consequences of a Brexit outcome to be beneficial for the UK economy – the first time since this survey began that one side of the argument is supported by none of the respondents.

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