Walking back from Cyprus

Mitu Gulati, Lee C. Buchheit , 20 March 2013

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On Friday 15 March 2013, European leaders trespassed on consecrated ground. They insisted that Cyprus impose losses – euphemistically dubbed a 'solidarity levy' – on insured depositors with Cypriot banks as a condition to receiving EZ/IMF bailout assistance. Entering Friday’s meeting, the leaders had four options on the table:

Topics: Macroeconomic policy
Tags: bailout, Cyprus, Eurozone crisis, EZ crisis

A no-further-bailouts principle

Tito Boeri, 20 July 2012

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Angela Merkel is right. There can’t be solidarity without control. She is also using the right words – “solidarity” and “control”.

Topics: EU policies
Tags: bailout, Eurozone crisis, Greece, Ireland, Portugal

Greece’s 2nd bailout: Debt restructuring with no debt reduction?

Ricardo Cabral, 29 July 2011

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The Council of the EU agreed on 21 July 2011 to a second bailout for Greece (Council 2011). This deal is predicated on “private-sector involvement”. The Council seems to have implicitly endorsed a form of private-sector involvement made by a private institution – the Institute of International Finance.

Topics: EU policies, Europe's nations and regions
Tags: bailout, Eurozone crisis, Greece

Europe's €200 billion reverse wealth tax explained

Harald Hau, 27 July 2011

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When the deal was announced, German Chancellor Merkel highlighted the private-sector involvement. She stressed that this was the result of German intransigence. According to the spin, private creditors have to accept a 21% write-down on their claims. This amounts to a €37 billion private-sector contribution. They also provide €12.8 billion in new loans for debt buyback.

Topics: EU policies, Europe's nations and regions, International finance, Poverty and income inequality
Tags: bailout, Eurozone crisis, Greece, Ireland, Portugal

The Eurozone debt crisis: Facts and myths

Charles Wyplosz, 9 February 2010

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Like any crisis, the new one generates myriads of misguided comments and reactions by journalists, financiers and policymakers. Ten myths that are frequently heard clash with ten facts that are frequently overlooked.

Topics: Financial markets, International finance
Tags: bailout, Debt crisis, eurozone, Greece

Will Geithner and Summers Succeed in Raiding the FDIC and Fed?

Jeffrey Sachs, 25 March 2009

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Geithner and Summers have now announced their plan to raid the Federal Deposit Insurance Corporation (FDIC) and Federal Reserve (Fed) to subsidize investors to buy toxic assets from the banks at inflated prices.

Topics: Financial markets
Tags: bailout, Geithner plan, global crisis debate

Money for nothing?

Johannes Van Biesebroeck, 10 February 2009

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On 21 December, 2008, the Canadian and Ontarian governments announced that they would provide the Canadian arms of General Motors and Chrysler with a combined $4 billion in loans. This represents 20% of a similar US aid package announced a day earlier by then-President Bush.

Topics: Microeconomic regulation
Tags: bailout, Canada, Car industry

The cost of resolving financial crises

Luc Laeven, 31 October 2008

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The crisis is evolving with breakneck speed. The debate about why it happened and how it will unfold is still very much ongoing, as Felton and Reinhart (2008) show.

Topics: Financial markets
Tags: bailout, financial crisis, fiscal cost, subprime crisis

An international perspective on the US bailout

Frank Westermann, Romain Rancière, Aaron Tornell, 20 October 2008

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As the US economy is hit by the financial crisis and associated bailout costs, it is useful to take an international perspective on current events. In the last three decades, many developing countries have also experienced financial crises and large bailouts.

Topics: Financial markets
Tags: bailout, financial crisis, financial liberalisation, growth

Reason with the messenger; don’t shoot him: value accounting, risk management and financial system resilience

Avinash Persaud, 12 October 2008

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The Economic Emergency Act of 2008 reaffirms the authority of the SEC to suspend fair value accounting. Observers elsewhere support a suspension of this accounting rule.

Topics: Financial markets
Tags: bailout, mark-to-market, subprime crisis

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