Fed versus ECB: How Target debts can be repaid

Hans-Werner Sinn 10 March 2012

a

A

Now that Bundesbank President Jens Weidman has expressed his concern about the rising TARGET balances within the Eurozone in an official letter to Mario Draghi, the issue can no longer be swept under the carpet. In February, the Bundesbank had a TARGET claim of €547 billion on the Eurosystem, while the Dutch central bank had one of €171 billion in January. These claims constitute more than half of both countries’ net foreign wealth.

a

A

Topics:  International finance

Tags:  ECB, eurozone, TARGET2

Brinkmanship in Brussels, Sturm and Drachma for Greece and Europe

Jacob Funk Kirkegaard 01 March 2012

a

A

Just as it did when Congress recently extended the payroll tax cut, brinkmanship has produced an early-morning deal in Europe to extend a new lifeline to Greece and clear the way for the biggest sovereign bond restructuring in history. Both pieces of the agreement – the privately held Greek debt write-down of more than €100 billion and the terms of the new bailout extension – have produced widespread doubts in markets and among many analysts.

a

A

Topics:  International finance

Tags:  eurozone, IMF, Greece

Apart from the fiscal compact – on competitiveness, nominal wages and labour productivity

Marga Peeters, Ard den Reijer 03 January 2012

a

A

Eurozone members that face the consequences of severe asymmetric shocks can, in the absence of labour mobility, accommodate by means of fiscal transfers. In order to avoid becoming a one-way transfer union from the core to the periphery, the EU needs to address structural imbalances and persistent current-account deficits and surpluses that are due to real exchange-rate misalignment.

a

A

Topics:  EU policies Productivity and Innovation

Tags:  eurozone, productivity, wages

Deleveraging in the Eurozone

Vincent O'Sullivan, Stephen Kinsella 17 December 2011

a

A

The capital shortfall at EU banks is 8% higher than originally thought, according to the latest assessment from the European Banking Authority (EBA 2011) released on 8 December. In the aggregate, European banks need to raise €114.7 billion as an exceptional, temporary capital buffer against sovereign debt exposures and to ensure their individual Core Tier 1 capital ratio reaches 9% of risk-weighted assets by the end of June 2012.

a

A

Topics:  Financial markets International finance

Tags:  eurozone, leverage, banks

From trade to domestic collapse? On the complementarity between exports and domestic sales

Nicolas Berman, Antoine Berthou, Jérôme Héricourt 16 December 2011

a

A

The Eurozone is close to slipping into a recession. The most recent OECD forecasts point to an average growth of 0.2% of GDP in volume within the EZ151 in 2012, ranging from -3% (Greece and Portugal) and -0.5% (Italy), to +0.6% (Germany) and +1% (Ireland).

a

A

Topics:  International trade

Tags:  eurozone, exports, French firms

The interplay of sovereign spreads and banks’ fragility in the Eurozone

Damiano Sandri, Ashoka Mody 23 November 2011

a

A

European policymakers are confronting a heightened crisis characterised by a perverse and seemingly intractable interplay between sovereign debt pressures and financial-sector fragilities (Wolff 2011). Three questions arise:

a

A

Topics:  Financial markets International finance

Tags:  eurozone, spreads, banks

How much capital do European banks need? Some estimates

Viral Acharya, Dirk Schoenmaker, Sascha Steffen 22 November 2011

a

A

The European banking system is freezing up. Several banks are not able to fund themselves in the market. The lack of market confidence in European banks is fed by the ongoing uncertainty about Eurozone sovereign debt (as well as real estate) to which these banks are exposed.

a

A

Topics:  Financial markets International finance

Tags:  eurozone, sovereign debt, banks, recapitalisation

The Eurozone needs exit rules

Cezary Wójcik, Christian Fahrholz 31 October 2011

a

A

With the sovereign debt crisis spreading across Europe and in the run-up to the next EU Summit there is no shortage of suggestions on how to save the Eurozone. Unfortunately, the majority of these suggestions have one of the following flaws. Either they address the long-term challenges without dealing with the short-term stabilisation problems (for example, Cooley and Marimon 2011) or they address the short-term stabilisation issues at the cost of the Eurozone’s long-term sustainability (de Grauwe 2011, and Delpa and Weizsaecker 2011).

a

A

Topics:  EU institutions EU policies

Tags:  eurozone, EU, exit rules

Is the recent bank stress really driven by the sovereign debt crisis?

Guntram Wolff 30 October 2011

a

A

Stress in the interbank market has increased significantly since July (Figure 1). There is now a significant debate on why this is the case and what would be the best way to address it (Financial Times 2011).1 Many have argued that the sovereign debt crisis isthe most important driver of banking stress in the Eurozone. If that view is correct, then the right approach to solving Europe’s banking problem is to solve the sovereign debt crisis. Recapitalising banks instead would be far too costly, in particular if one wanted to cater for a haircut in Italy.

a

A

Topics:  EU policies Financial markets International finance

Tags:  eurozone, stock markets, Eurozone crisis, sovereign bonds

Resolving the current European mess

Charles Wyplosz 25 October 2011

a

A

Editors' note: This column forms part of a VoxEU.org eBook 'The Future of Banking', to be published on Tuesday 25 October.

a

A

Topics:  EU institutions EU policies International finance

Tags:  ECB, eurozone, sovereign debt, EFSF

Pages

Events