Debora Revoltella, 22 January 2019

Europe is at risk of falling behind its global competitors. In a period of radical technological transformation, European firms are investing too little, with a gap both in tangible and intangible investment compared to the US. This column calls for a ‘retooling’ of Europe’s economy in relation to skills, innovation finance, the business environment, infrastructure, and deepening the Single Market.

Vitezslav Titl, Benny Geys, 13 January 2019

Despite public concerns about the role and influence of big donors on politics, questions remain regarding the mechanisms behind political favouritism to donor corporations. Using 2006–2014 data on political donations and public procurement allocations in the Czech Republic, this column finds that firms that increase their donations to a political party see the value of their public procurement contracts rise in the following year. Contracting authorities appear to engage in different forms of strategic behaviour to favour corporate donors, who tend to face fewer competitors in more regulated and open procurement procedures.

Yujin Kim, Chirantan Chatterjee, Matthew J. Higgins, 15 December 2018

Investments in early-stage companies are declining, as venture capital firms find it hard to evaluate the risks and rewards from investing in the technologies. The column shows how the EU Orphan Drug Act caused a movement towards early-stage deals in affected sectors in both the EU and the US. Venture capital firms were more likely to invest at an early stage in sectors covered by the regulation and also made more early-stage investments.

Tobias Adrian, John Kiff, 01 December 2018

The financial system has undergone far-reaching changes since the 2008 Global Crisis. This column casts those changes in terms of shifts in the way financial intermediaries manage their balance sheets, and also discusses the regulatory reform agenda and reviews the impact of regulations on market liquidity and credit availability. The current evidence suggests that the financial system has become safer, at limited unintended cost.

Daniel Calvo, Juan Carlos Crisanto, Stefan Hohl, 23 November 2018

A well designed financial supervisory architecture is essential for the effective functioning of any financial system. Using a survey of 82 jurisdictions, this column describes the state of financial supervisory models around the world and highlights the key institutional changes after the Global Crisis. It finds that the prevailing financial supervisory model continues to be sectoral, but that there have been incremental but important changes within existing models. Central banks have acquired more financial oversight responsibilities after the Global Crisis, and many jurisdictions have enhanced or are in the process of enhancing their consumer/investor protection supervision.


The objective of the Systemic Risk and Prudential Policy course is to present state of the frontier research on systemic risk and to illustrate its implications for micro and macro prudential regulation as well as monetary and competition policy.
The course covers the main models of systemic risk proposed in the literature and the quantitative techniques for the measurement and prediction of systemic risk.

The course provides a critical summary of the prudential regulation initiatives for systemic risk, highlighting the limitations of current prudential policy, the potential of the new macroprudential approach, and the costs and benefits of the proposed policy measures.

Additionally, the course examines the rise of shadow banks, the role of banks as providers of liquidity insurance, and the interaction between securitization and systemic risk.

Vincent Bouvatier, Gunther Capelle-Blancard, Anne-Laure Delatte, 11 September 2018

Tax havens are estimated to concentrate 8% of global private financial wealth, reducing annual global tax revenues by about $200 billion. This column uses new country-by-country regulatory data on the foreign commercial presence of EU banks and compares it against gravity model predictions to examine the contribution of EU banks to tax evasion. It finds that bank activity in tax havens is three times larger than what is predicted by the gravity model, and that British and German banks are particularly present in tax havens. 

Sauro Mocetti, Giacomo Roma, Enrico Rubolino, 16 August 2018

A large proportion of workers are employed in licensed occupations whose entry conditions and economic returns are significantly shaped by regulation. This column examines the consequences of two waves of liberalisation in professional services in Italy since the 2000s for intergenerational mobility and allocative efficiency. The analysis reveals a substantial decrease in the propensity to follow the same career as one’s parents, particularly among less able children, suggesting that anticompetitive regulation might produce inefficiencies in the allocation of talents across occupations.

Patrick Bolton, Martin Oehmke, 01 August 2018

When banks are too big to fail, resolution frameworks for are hobbled by the mismatch between their global nature and the national scope of regulators. This column argues that while a ‘single point of entry’ resolution is efficient, it is often incompatible with the interests of regulatory authorities, both ex ante and ex post. Taking the political constraints and incentives of national regulators into account implies that a credible resolution regime cannot be‘one size fits all’.

Dirk Jenter, 12 July 2018

The ways in which the size and nature of a company's board of directors affects its performance are complex. Using a dataset of German firms, Dirk Jenter shows that profitability and stock market valuations decrease as board sizes increase. Ill-designed board size regulations can therefore negatively impact a firm's performance.

Theo Nyreröd, Giancarlo Spagnolo, 28 May 2018

The European Commission has recently proposed a directive that provides horizontal protection for whistleblowers in the EU. This could put the EU on a par with the US with respect to protection, but recent episodes of retaliation suggest that it may not be enough. This column compares the whistleblower protection policies in the EU and the US and argues that reward programmes are particularly appropriate for specific regulatory areas where wrongdoing can cause substantial harm.

Botond Köszegi, 25 May 2018

Classical economics holds that regulation prevents individuals from making free decisions about purchases, by limiting their range of choices. Botond Kőszegi discusses his research that suggests this may not be the case. For complex purchase decisions involving contracts, regulation informs the way individuals search the marketplace, and enables them to search a greater range of products. This video was recorded at the 2018 RES Conference.

Filipa Sá, 15 May 2018

There is growing concern among households and policymakers alike that house prices in England and Wales are being driven up by foreign buyers making investment purchases. Filipa Sá examines the link between foreign investment and house prices, using local authority data over a span of 15 years. This video was recorded at the 2018 RES annual conference.

Jihad Dagher, 22 March 2018

Three hundred years of financial regulation offer a cautionary tale to today’s push against yesterday’s regulations. This column revisits the political economy of financial crises and documents a consistent pattern of politically driven procyclical regulations. These regulatory cycles have a poor track record.  

Colin Mayer, 24 January 2018

Following the 2008 financial crisis, investments recovered quicker in the US than in Europe. Colin Mayer discusses how taxation and regulation have exacerbated companies' long-term debt problem. This video was recorded at the RELTIF book launch held in London in January 2018.

Zsofia Doeme, Stefan Kerbl, 24 January 2018

Risk weights define each bank's minimum capital requirements, but many doubt the comparability of the risk weights that banks report. This column quantifies the variability of these weights across banks, and finds that the country where a bank is headquartered creates statistically significant and economically important differences. Model output floors, as recently agreed upon by the Basel Committee, would reduce this unintended risk weight heterogeneity.

Yener Altunbaş, Simone Manganelli, David Marques-Ibanez, 14 November 2017

Prudential supervision of banks has increasingly relied on capital requirements. But bank capital played a relatively minor role in predicting bank solvency during the Global Crisis, except for scarcely capitalised banks. This column argues that while capital is a helpful tool to support bank financial stability, it is complex for supervisors to calibrate it precisely. Macroprudential authorities should be able to complement capital-based tools with additional, borrower-based prudential instruments.

Richard Baldwin, Thomas Huertas, Tessa Ogden, 13 October 2017

The Global Crisis started ten years ago and proved a turning point in global economic policy. CEPR organised a high-level conference to discuss whether the regulatory reaction has been sufficient and where the next crisis might come from. This column summarises the conference discussions and introduces a set of video interviews with leading economists at the conference, including Paul Krugman, Anat Admati, John Vickers, Paul Tucker, among others.

Stephen Cecchetti, Kim Schoenholtz, 27 September 2017

Financial firms have paid fines totalling more than $9 billion for manipulating LIBOR, yet this flawed benchmark has not been replaced. This column argues that there are reduced incentives for banks to participate in setting the LIBOR rate, and so the potential of, and incentives for, manipulation remain. Although LIBOR is unsustainable, international regulators are working to produce more robust alternatives and to smooth the transition.

Rachel Griffith, Martin O'Connell, Kate Smith, 21 March 2017

Governments have long used taxation to correct for the socially costly overconsumption of alcohol, but as the external cost of overconsumption varies across drinkers, a single tax rate is not optimal. This column argues that variation in preferences for different products and in price responsiveness across heavy and light drinkers provides scope to improve welfare by varying tax rates across alcohol products. The proposed framework is well suited to addressing other sources of external costs, such as obesity.


Vox eBooks


CEPR Policy Research