The Eurozone crisis has demonstrated how an insolvent sovereign can destroy a national banking system, Greece, but also how an insolvent banking system can almost sink the sovereign – Ireland and Spain (Wyplosz 2012).
Banking union: Ireland vs Nevada, an illustration of the importance of an integrated banking system
Daniel Gros, 27 November 2012
Don't expect too much from EZ fiscal union – and complete the unfinished integration of European capital markets!
Mathias Hoffmann, Bent E. Sørensen, 9 November 2012
The sovereign debt crisis apparently suggests that Eurozone economies should now move substantially closer towards fiscal union. Current policy discussions revolve much more around how such a fiscal union should be designed than whether fiscal union can solve Europe’s underlying problems of economic coherence. What can we expect from a fiscal union?
Spillover effects in a fiscal union: Evidence from US states and Treasury bond markets
Rabah Arezki, Bertrand Candelon, Amadou Sy, 1 August 2012
The market for US municipal bonds, a $2.9 trillion tax-exempt bond market amounting to about one third of the US treasury market, has often been viewed as a safe haven by individual investors.1 The most recent US state to default was Arkansas in 1933, during the Great Depression.
The euro’s salvation lies in a little less Europe; not more Europe
Avinash Persaud, 25 April 2012
The European credit crisis is as political as it is complicated. This breeds solutions in search of the problem. One of these is the ubiquitous idea that the euro’s woes can only be settled by fiscal union; the more rigid the better and no room for backsliding.
Lessons for Europe’s fiscal union from US federalism
C Randall Henning, Martin Kessler, 25 January 2012
The Eurozone crisis and debate over fiscal reform have led many observers to pray for salvation by a modern, European version of Alexander Hamilton. By this they generally mean someone capable of leading a movement for a robust fiscal union and implementing this vision.
The threat to use the printing press
Hans-Werner Sinn, 18 November 2011
Fortunately, Nicolas Sarkozy is not getting his banking licence for the EFSF. The Luxembourg rescue fund is not going to buy government bonds of endangered countries with freshly printed money. The ECB, however, may continue to do this.
Eurozone banks must be freed from national capitals
Nicolas Véron, 13 October 2011
Most of Europe has been engulfed by a systemic banking crisis for more than four years, even as policymakers and bankers themselves have strived to deny it. As pointed out by many columns on this site over the past few months (see a collection on the EZ Crisis Phase 2 page), things are even worse.
- A tale of two depressions: What do the new data tell us? February 2010 updateEichengreen, O’Rourke
- The ECB’s stealth bailoutSinn
- Educated in America: College graduates and high school dropoutsHeckman, LaFontaine
- Eurozone breakup would trigger the mother of all financial crisesEichengreen
- Panic-driven austerity in the Eurozone and its implicationsDe Grauwe, Ji
Adelman, 28 October 2013
Reichlin, Giugliano, 7 November 2013
Holmes, McGrattan, Prescott
Beck, De Haas, Ongena