Sovereign default risk and banks in Europe’s monetary union

Harald Uhlig, 5 September 2013

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With the one year anniversary of ECB President Draghi’s announcement to “do whatever it takes” and the announcement of the OMT (Outright Monetary Transactions) programme, bond yields have declined and fears of sovereign defaults have receded in countries such as Portugal, Spain and Italy. We all hope that this danger has passed!

Topics: Global crisis, International finance
Tags: Eurozone crisis

External liabilities and crisis risk

Luis AV Catão, Gian Maria Milesi-Ferretti, 4 September 2013

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Much has been written about the causes of the global financial crisis of 2008 – the role of the US subprime crisis as a triggering event, the generalised period of easy credit and financial excesses fuelling growing economic and financial vulnerabilities, the failures to properly regulate large systemic financial institutions.

Topics: Global crisis
Tags: debt, Eurozone crisis, liabilities, net external debt

The downsizing dilemmas of European employers

Hendrik P van Dalen, Kène Henkens, 28 August 2013

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Drastic measures are taken when managers formulate strategies to survive economic crises. Among these are downsizing, outsourcing, firing workers and cutting back on wages. But how do firms balance their interests against those of their workers?

Topics: Labour markets
Tags: downsizing, Eurozone crisis, firing, hiring, unemployment

Is there a future for international banks?

Dirk Schoenmaker, 25 August 2013

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The international, centralised, business model of banks has come under pressure after the global financial crisis. Supervisors are leaving their traditional consolidated approach, under which a bank as a whole is assessed. Instead, they are moving towards a stand-alone approach, under which the national subsidiaries are supervised separately.

Topics: Global crisis, International finance
Tags: banking, Eurozone crisis, international banks, Too big to fail

To end the Eurozone crisis, bury the debt forever

Pierre Pâris, Charles Wyplosz, 6 August 2013

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The Eurozone’s debt crisis is getting worse despite appearances to the contrary.

Topics: EU institutions, Macroeconomic policy
Tags: Debt crisis, debt monetisation, Eurozone crisis

How have financial markets reacted to financial-sector reforms after the crisis?

Alexander Schäfer, Isabel Schnabel, Beatrice Weder di Mauro, 2 August 2013

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After the near-collapse of large parts of the financial system and unprecedented support measures from the public sector and central banks, the leaders of the G20 agreed on the need for a radical overhaul of the financial system.

Topics: International finance
Tags: CDS, credit default swap, Eurozone crisis, global crisis, regulation

Unity in diversity: Protecting the common market with divergent macroprudential policies

Aerdt Houben, Jan Kakes, 30 July 2013

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The credit crisis and ensuing sovereign crisis powerfully illustrate the limitations of traditional macroeconomic policies to contain financial imbalances. Despite debate on the desirability to dampen credit cycles and asset-price fluctuations, countries have long been reluctant to include this in policy objectives.

Topics: Global crisis, International finance
Tags: Eurozone crisis, GIIPS, Greece, Ireland, Italy, macroprudential tools, Portugal, Spain

Why economics needs economic history

Kevin Hjortshøj O’Rourke, 24 July 2013

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The current economic and financial crisis has given rise to a vigorous debate about the state of economics, and the training which graduate and undergraduates economics students are receiving. Importantly, among those arguing most strongly for a change in the way that young economists are trained are the ultimate employers of these students, in both the private and the public sector.

Topics: Economic history
Tags: Eurozone crisis, global crisis

How to limit the ECB’s OMT?

Harald Benink, Harry Huizinga, 12 July 2013

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Speaking about the Outright Monetary Transactions (OMT) facility during a recent press conference Mario Draghi, ECB President, said that “frankly, when you look at the data, it’s really very hard not to state that OMT has been probably the most successful monetary policy measure undertaken in recent times” (Draghi 2013).

Topics: Europe's nations and regions
Tags: banking union, Eurozone crisis, OMT

Short-time work: Does it save jobs?

Almut Balleer, Britta Gehrke, Wolfgang Lechthaler, Christian Merkl, 12 July 2013

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Short-time work means that the government subsidises the reduction of the working time of an employee to prevent firing. Many countries allow a firm to use this instrument when the demand for its products is lower than its production potential. Since more firms face a shortfall of demand in recessions, there is a rule-based component of short-time work.

Topics: Europe's nations and regions, Labour markets
Tags: Eurozone crisis, Germany, jobs, short-time work

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