The euro area debt crisis saw the region ravaged by multiple sovereign bond doom loops and has inspired several proposals for a single safe asset for the region. While a lack of political consensus has proven the main obstacle to date, technical issues relating to the complexity of splitting the existing sovereign debt stock and concerns on contagion amongst senior and junior debt structures also weigh in. This column, part of the VoxEU debate on euro area reform, illustrates how a 20-year Purple bond transition could address these issues and offer a path to genuine Eurobonds.
Financial regulation and banking
Blockchain technology has the potential to be a catalyst for change to incumbent financial sector firms. In this Vox Talk, Tim Phillips talks to Simon Johnson, one of the authors of the latest Geneva Report on the World Economy which looks at the technology and its possible applications.
The idea of a new software system that powers a consensus-driven form of shared record keeping has already had a profound effect, encouraging rapid and substantial investment in what is now commonly referred to as blockchain technology. This column introduces the latest Geneva Report on the World Economy, which assesses the available evidence and likely impact for this technology across a wide range of applications and explores the potential use cases for the financial sector, and the ways in which the organisation of these activities may change over time.
Central banks are concerned about the impact of cryptocurrencies. In this Vox Talk, Tim Phillips talks to Beatrice Weder di Mauro about the sources of this concern, and whether the disappearance of cash and a desire to escape the zero lower bound will lead to central banks issuing their own digital currencies.
Blockchain technology provides decentralised consensus, which potentially enlarges the contracting space using tamper-proof smart contracts. But this implies distributed information. The column argues that there is a tension between these two features of blockchain. While complete contracts may increase competition, distributed information may also make collusion between incumbents more effective.
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Vox eBooks
Casey, Crane, Gensler, Johnson, Narula, 15 July 2018
Events
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14 August - 1 September 2018 / / World Trade Organization
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20 - 21 August 2018 / Goethe University Frankfurt / Central Bank Research Association (CEBRA) and the Research Center SAFE (Sustainable Architecture for Finance in Europe) at Goethe University Frankfurt
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27 - 28 August 2018 / Sala del Sindaco, Palazzo Orsini, Galatina (Lecce) / Banque de France and Paris School of Economics
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10 - 11 September 2018 / Leipzig University / Leipzig University, European Association of Young Economists
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12 - 13 September 2018 / Rome, Italy / European Center of Sustainable Development , CIT University
