The new sustainability factor of the public pension system in Spain
Rafael Doménech, Víctor Pérez-Díaz, 11 December 2013
Based on the report issued by a Committee of Experts, the Spanish Parliament will pass a new law that implements an innovative sustainability factor in the public pension system. This column argues that the proposal solves the problem of financial sustainability in the long run while opening a wider debate on the welfare system and growth under conditions of increased global competition.
As in many other European countries, long-term trends in population growth and life expectancy in Spain make the current pay-as-you-go pension system unsustainable. A later baby boom and a recent immigration wave help explain why Spain has postponed the implementation of reforms already introduced in other European countries in the 1990s (see, for example, Chapter 1 of OECD 2012).
Topics: Europe's nations and regions, Welfare state and social Europe
Tags: accountability, democracy, pensions, Spain, Sustainability, transparency
The determinants of banks’ liquidity buffers and the role of liquidity regulation
Clemens Bonner, Iman van Lelyveld, Robert Zymek, 1 November 2013
What are the determinants of banks’ liquidity holdings and how are these reshaped by liquidity regulation? Based on a sample of 7,000 banks in 30 OECD countries, this column argues that banks’ liquidity buffers are determined by a combination of both bank- and country-specific variables. The presence of liquidity regulation substitutes for most of these determinants while complementing the role of size and institutions’ disclosure requirements. The complementary nature of disclosure and liquidity requirements provides a strong rationale for considering them jointly in the design of regulation.
Until recently, liquidity risk was not the main focus of banking regulators. However, the 2007–2009 crisis showed how rapidly market conditions can change, exposing severe liquidity risks for some institutions. Although capital buffers were effective in reducing liquidity stress to some extent, they were not always sufficient.
Topics: Financial markets, Microeconomic regulation
Tags: banking, disclosure, liquidity, regulation, Too big to fail, transparency
Disclosure, transparency, and market discipline
Xavier Freixas, Christian Laux, 17 April 2012
Faith in market discipline has been shattered by the financial crisis. This column argues that the failure of market discipline has different roots. It points to a lack of transparency and efficiency, particularly when it is needed most. In order to rectify this, however, it is not enough to merely increase the provision and disclosure of information. Instead, transparency depends on how that information is interpreted and used.
Topics: Global crisis, International finance
Tags: disclosure, financial regulation, global crisis, Market discipline, transparency
Looking beyond the incumbent: The effects of exposing corruption on electoral outcomes
Ana De La O, Alberto Chong, Dean Karlan, Léonard Wantchékon, 23 January 2012
For democratic theorists, the notion that greater transparency improves accountability is axiomatic: when voters find out about political corruption, they punish the offending politicians by not voting for them again. But, the authors of CEPR DP8790 argue, many voters also respond to evidence of corruption by not voting at all – indicating that more transparency might not automatically result in a healthier democratic process.
Vox readers can download CEPR Discussion Paper 8790 for free here.
Journalists are entitled to free DP downloads on request; please contact firstname.lastname@example.org. To learn more about subscribing to CEPR's Discussion Paper Series, please visit the CEPR website.
Topics: Development, Politics and economics
Tags: accountability, Corruption, democracy, elections, Information, transparency
Central banks’ voting records and future policy
Kateřina Šmídková, Jan Zapal, Roman Horváth, 13 November 2011
Does the publishing of voting records improve the transparency of monetary policy? This column argues voting records indeed contain informative power about future monetary policy but only if there is sufficient independence in voting across board members and if the signals about the optimal policy rate are noisy.
Monetary-policy transparency has several dimensions, such as volume, quality, and timeliness of disclosed information. Transparency-cautious central banks typically release the voting records from monetary-policy meetings together with the minutes.
Topics: Macroeconomic policy, Monetary policy
Tags: Central Banks, monetary policy, transparency
The damaged ECB legitimacy
Anne Sibert, 15 September 2011
The European Central Bank was once known for its focus on price stability. Since the global economic crisis, however, its role has extended to saving banks and sovereign countries. This column argues that such a move has badly harmed the institution’s legitimacy – something that will damage both its policy effectiveness and confidence in the governing bodies of the EU as a whole.
The ECB’s role has evolved in its decade-long existence. In this note I describe how the choices of the ECB have damaged the institution’s legitimacy.
Topics: EU policies, Europe's nations and regions, Global crisis, Institutions and economics
Tags: ECB, Eurozone crisis, transparency
Drawing a line under Europe’s crisis
Barry Eichengreen, 17 June 2010
Financial crises feed on uncertainty. This essay warns that the longer the Eurozone crisis is allowed to linger, the greater will be the damage. But Europe can take concrete actions to bring it to an end. It should make bank stress tests public, provide more clarity on its special purpose vehicle, move forward with restructuring Greece’s debt, and support growth through quantitative easing.
Financial crises feed on uncertainty. The longer uncertainty is allowed to linger, the greater the damage to confidence and the more difficult it becomes to repair. It is essential therefore that European policymakers move decisively to draw a line under the crisis.
Topics: EU institutions
Tags: Eurozone crisis, Eurozone rescue, transparency, uncertainty
Extracting more from EITI
Helmut Reisen, Dilan Ölcer, 17 February 2009
The Extractive Industries Transparency Initiative has directed the international community’s attention to a sector that has traditionally been veiled in secrecy. But it has not been effective in producing change. Why have so many resource-rich countries failed to lower perceived corruption? This column points to low-quality information provided in reports and weak civil societies in resource-rich countries as possible explanations. Reforms and improvements are needed.
The Extractive Industries Transparency Initiative (EITI) has been highly promoted as a tool for increasing transparency and curbing corruption, as part of the international soft law on which the international community increasingly relies (
Tags: Corruption, extractive industries, transparency
Optimal central bank transparency
Carin van der Cruijsen, Sylvester Eijffinger, Lex Hoogduin , 12 August 2008
Transparency is the new trend in central banking, but it has both costs and benefits. This column discusses research aimed at identifying the optimal level of transparency. The results suggest that US and European central banks may be too transparent.
In recent decades, both monetary theory and monetary policymakers have come to emphasise the importance of expectations for the transmission of monetary policy.1 The New Keynesian model – more particularly the Phillips curve embedded in it – explains current inflation by the output gap and expected future inflation.
Topics: Monetary policy
Tags: Central Banks, transparency