Fiscal dimensions of central banking: the fiscal vacuum at the heart of the Eurosystem and the fiscal abuse by and of the Fed: Part 2

Willem Buiter 25 March 2009

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The Bank of England

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Topics:  Monetary policy

Tags:  ECB, Fed, Bank of England, fiscal backing

Fiscal dimensions of central banking: the fiscal vacuum at the heart of the Eurosystem and the fiscal abuse by and of the Fed: Part 3

Willem Buiter 25 March 2009

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An entirely valid reason for the ECB/Eurosystem to refuse to engage in either outright purchases of private securities or in unsecured lending to the banking sector (or to the non-financial enterprise sector directly), is that there is no ‘fiscal Eurozone’ – just as there is no fiscal EU. The absence of a fiscal Europe that matters here is a narrow one.

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Topics:  Monetary policy

Tags:  ECB, Eurosystem, fiscal Europe, wnt

Fiscal dimensions of central banking: The fiscal vacuum at the heart of the Eurosystem and the fiscal abuse by and of the Fed: Part 2

Willem Buiter 24 March 2009

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Why has there not been quantitative easing in the Eurozone? Good question.

No treaty-based obstacle

There is no treaty-based obstacle to the ECB/Eurosystem buying Eurozone government securities in the secondary markets. Indeed, both the ECB and the 16 national central banks of the Eurosystem hold Eurozone government securities on their balance sheets. Article 101.1 of the Consolidated version of the Treaty Establishing the European Community reads as follows:

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Topics:  Monetary policy

Tags:  ECB, Fed, quantitative easing

Fiscal dimensions of central banking: The fiscal vacuum at the heart of the Eurosystem and the fiscal abuse by and of the Fed: Part 1

Willem Buiter 08 May 2010

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Editors’ note: This is the first of a four-part series of Vox columns culled from Willem Buiter’s recent post on his FT-sponsored blog, Maverecon.

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Topics:  Financial markets

Tags:  ECB, Eurosystem, quantitative easing

Was the euro a mistake?

Barry Eichengreen 20 January 2009

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What started as the Subprime Crisis in 2007 and morphed in the Global Credit Crisis in 2008 has become the Euro Crisis in 2009. Sober people are now contemplating whether a euro area member such as Greece might default on its debt. In addition to directly damaging bank balance sheets, this would destroy confidence in its banking and financial system. Unable to borrow and facing horrific bank recapitalisation costs, the country would have to print money. To do so it would have to abandon the euro and reinstate its old national currency.

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Topics:  Global economy

Tags:  ECB, global crisis, Government default, Eurozone breakup

The euro at ten: Why do effects on trade between members appear smaller than historical estimates among smaller countries?

Jeffrey Frankel 24 December 2008

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With the tenth anniversary of the launching of the euro, everyone is taking stock. The record of the euro shows both pluses and minuses. Looking back, the euro has in many ways been more successful than predicted by the sceptics – many of them American economists. The historic transition to a monetary union among 11 countries in 1999 went smoothly, the euro instantly became the world’s number two international currency, and the officials of the European Central Bank (ECB) have from the beginning worked as citizens of Europe rather than as representatives of home constituencies.

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Topics:  EU policies International finance

Tags:  ECB, euro, EU trade, monetary unions, CFA franc

The first ten years of the euro

Marco Buti, Vitor Gaspar 24 December 2008

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“It is in the nature of beginning that something new is started which cannot be expected from what may have happened before. This character of startling unexpectedness is inherent in all beginnings.” – Hannah Arendt, The Human Condition, 1958.

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Topics:  EU institutions EU policies Monetary policy

Tags:  ECB, euro, EMU

The folly of the central banks of Europe

John Muellbauer 27 October 2008

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When future economic historians look back to trace the triggers for the October 2008 financial panic and the unnecessarily severe recession of 2009, they will likely put their fingers on two.

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Topics:  Financial markets

Tags:  ECB, subprime crisis, financial crisis, UK, rescue package, currency crisis

The beginning of the end game…

Daniel Gros, Stefano Micossi 20 September 2008

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The US financial system is being nationalised. The piecemeal approach which culminated with the AIG operation was clearly not working. The US government had taken control of its biggest insurance company just two weeks after it had to save Fannie and Freddie, by far the world’s largest mortgage underwriters. All this was not enough to restore orderly market conditions, hence the US political system is working over time to find a general solution whose outline is already apparent.

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Topics:  Financial markets

Tags:  ECB, international financial crises, subprime crisis, bank failure

ECB credibility unprecedentedly low

Petra Geraats, Francesco Giavazzi, Charles Wyplosz 09 September 2008

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The European Central Bank (ECB) attaches great importance to the credibility that people have in its ability to achieve its primary objective of price stability in the medium term. In the ‘Introductory Statement’ to the monthly press conference the Governing Council has repeatedly expressed its “strong determination to keep medium and long-term inflation expectations firmly anchored in line with price stability”. However, ECB credibility has steadily eroded during the last years and has now reached worrisomely low levels.

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Topics:  Monetary policy

Tags:  ECB, monetary policy

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