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:
Walking back from Cyprus
Mitu Gulati, Lee C. Buchheit , 20 March 2013
A no-further-bailouts principle
Tito Boeri, 20 July 2012
Angela Merkel is right. There can’t be solidarity without control. She is also using the right words – “solidarity” and “control”.
Greece’s 2nd bailout: Debt restructuring with no debt reduction?
Ricardo Cabral, 29 July 2011
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.
Europe's €200 billion reverse wealth tax explained
Harald Hau, 27 July 2011
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.
The Eurozone debt crisis: Facts and myths
Charles Wyplosz, 9 February 2010
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.
Will Geithner and Summers Succeed in Raiding the FDIC and Fed?
Jeffrey Sachs, 25 March 2009
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.
Money for nothing?
Johannes Van Biesebroeck, 10 February 2009
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.
The cost of resolving financial crises
Luc Laeven, 31 October 2008
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.
An international perspective on the US bailout
Frank Westermann, Romain Rancière, Aaron Tornell, 20 October 2008
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.
Reason with the messenger; don’t shoot him: value accounting, risk management and financial system resilience
Avinash Persaud, 12 October 2008
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.
- Fiscal consolidation: At what speed?Blanchard, Leigh
- Public debt and economic growth, one more timePanizza, Presbitero
- Escaping liquidity traps: Lessons from the UK’s 1930s escapeCrafts
- The lessons of the North Atlantic crisis for economic theory and policyStiglitz
- Rethinking macroeconomic policyBlanchard
- A tale of two depressions: What do the new data tell us? February 2010 updateEichengreen, O’Rourke
- Educated in America: College graduates and high school dropoutsHeckman, LaFontaine
- Eurozone breakup would trigger the mother of all financial crisesEichengreen
- Debt, deleveraging, and the liquidity trap: A new modelKrugman
- Panic-driven austerity in the Eurozone and its implicationsDe Grauwe, Ji
Reichlin, Baldwin, 14 April 2013
CEPR Policy Research
- Political Credit Cycles: The Case of the Euro ZoneFernández-Villaverde, Garicano, Santos
- Winning by Losing: Incentive Incompatibility in Multiple QualifiersDagaev, Sonin
- Income and schoolingBrückner, Gradstein
- Monetary Policy and Rational Asset Price BubblesGalí
- Does Supporting Passenger Railways Reduce Road Traffic Externalities?Lalive, Luechinger, Schmutzler
- How the EZ crisis is permanently changing EU institutionsMicossi
- WTO 2.0: Global governance of supply-chain tradeBaldwin
- Is US economic growth over? Faltering innovation confronts the six headwindsGordon
- The economic crisis: How to stimulate economies without increasing public debtWood
- Austerity: Too Much of a Good Thing?Corsetti