Puriya Abbassi, Falk Bräuning, Falko Fecht, José-Luis Peydró, 02 April 2015

The Global Crisis and subsequent sovereign debt crisis in the Eurozone severely distressed wholesale funding markets. This column argues that in the Eurozone, interbank funding conditions tightened particularly for cross-border borrowing. Moreover, during the worst moments of the crisis, the same borrower bank could pay different prices (up to 100 basis points) for identical loans during the same day. Non-standard monetary policy measures help mitigate these liquidity disruptions, with stronger effects in countries under distress.


These issues will be addressed:
1) History: Maastricht Treaty and Beyond: Broadening and Deepening
2) Trip down memory lane: Eurozone 1999 -- 2009
3) Does OCA necessitate a fiscal union? Has the OCA-endogeneity hypothesis to be reconsidered?
4) After 2009: Economic theory encounters political and social realities
5) Challenges and Strategic Choices Facing the EU: Is The Fiscal Union Feasible?
6) "Fiscal Union": Concepts and the future
7) Savings and Current accounts
8) Eurozone's Demographics and Fiscal Stance: Implications the Future?

William Cline, 30 August 2012

Interest rates on Italian and Spanish bonds are back up to their 2011 levels, raising alarm bells across Europe. But this column argues that the media’s hard-held belief that neither Italy nor Spain can withstand interest rates of 7% is wrong.

Daniel Gros, 11 August 2011

Investors are anticipating the unravelling of the 21 July 2011 “solution” and a breakdown of the interbank-market that would throw the economy into an “immediate recession” like the one experienced after the Lehman bankruptcy. This column argues that this will happen without quick and bold action. The EFSF can’t work as designed but if it were registered as a bank – which would give it access to unlimited ECB re-financing – governments could stop the generalised breakdown of confidence while leaving the management of public debt in the hand of the finance ministers.


CEPR Policy Research