The first step in Europe’s banking union is achievable, but it won’t be easy

Nicolas Véron 29 October 2012

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The leaders of Eurozone countries issued an unprecedented commitment on 29 June; the statement began, “[w]e affirm that it is imperative to break the vicious circle between banks and sovereigns” (Euro Area Leaders 2012). This statement officially acknowledged leaders’ intention to break the ‘doom loop’ of the mutually-reinforcing deterioration of credit conditions afflicting weaker member states such as Spain and the banks headquartered in them.

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Topics:  EU institutions Europe's nations and regions

Tags:  ECB, crisis management, EZ banking union

The first step in Europe’s banking union is achievable. But it won’t be easy.

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A

The leaders of Eurozone countries issued an unprecedented commitment on 29 June; the statement began, “[w]e affirm that it is imperative to break the vicious circle between banks and sovereigns” (Euro Area Leaders 2012). This statement officially acknowledged leaders’ intention to break the ‘doom loop’ of the mutually-reinforcing deterioration of credit conditions afflicting weaker member states such as Spain and the banks headquartered in them.

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Topics:  EU institutions Europe's nations and regions

Tags:  ECB, crisis management, EZ banking union

Banking union as a crisis-management tool

Charles Wyplosz 16 October 2012

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There can be no banking system without a lender of last resort. Some countries have various mechanisms that provide lending in first resort when a bank fails. This can be a deposit insurance agency, a rainy day fund fed by bank dues, or an understanding that banks rescue each other when the need arises. But large banks or a collection of small banks typically have balance sheets that far exceed available resources. This is why central banks must be lenders of last resort, even when their role is clouded in constructive ambiguity to mitigate moral hazard.

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Topics:  EU institutions Europe's nations and regions

Tags:  ECB, crisis management, EZ banking union

Crisis Management at Cross-Roads

16 November 2009 - 1 January 1970, Auditorium, National Bank of Belgium, Brussels

Event Type

Conference

Institution

SUERF, CEPS and BFF
Dates

Start Date

Mon, 11/16/2009

Location

Auditorium, National Bank of Belgium, Brussels

More information

www.suerf.org

Attendance

Yes
Organizer

Organizer(s)

Michael Bailey

Contact Email

michael.bailey@oenb.at

Disclaimer: Vox is not responsible for the accuracy of this information.


Topics

Institutions and economics
Tags
lender of last resort, crisis management, Cross-Border Bank Resolution, Deposit Guarantee Schemes

Crisis management in the EU

Sylvester Eijffinger 04 December 2008

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The ECB is doing crisis prevention in many ways, in particularly through promoting co-ordination and co-operation between national supervisors, mainly through the ESCB Banking Supervision Committee, and providing liquidity management on the inter-bank markets. A non-binding Memorandum of Understanding (MoU) on Cross-Border Financial Stability was also signed last summer between the Financial Supervision Authorities, Central Banks and the Finance Ministries of the European Union. Stress test and crises management simulations have also taken place.

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Topics:  EU policies Financial markets

Tags:  monetary policy, EU, financial crisis, crisis management

The IMF as a reserve manager

Michael Bordo, Harold James 18 June 2008

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In the original conception of the 1944 Bretton Woods Conference, the International Monetary Fund (IMF) was created to deal with problems that had afflicted the interwar world, particularly the lopsided distribution of reserves and the deflationary consequences for the international economy – as well as with crisis management. Today the IMF has been almost completely sidelined from many of the major governance issues of the international financial system. In particular, it is much less active as a financial institution.

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Topics:  International finance

Tags:  IMF, reserves, crisis management