Posted on May 12, 2011 by iMFdirect
By Antonio Borges
(Versions in Español, Français, Português, Русский)
Banks―and the loans they provided in the run-up to the crisis―are at the heart of Europe’s problems today.
Yet it would be wrong to conclude that the crisis was caused by too much financial integration. In fact, the real problem may have been that there was too little financial integration.
Policies to promote deeper integration of Europe’s banks―including through cross-border merger and acquisitions―should be part of the solution. (more…)
Filed under: Economic outlook, Europe, IMF, International Monetary Fund | Tagged: banks, capital flows, cross-border mergers and acquisitions, current account deficits, European Union, external debt, financial integration, financial sector, fixed exchange rates, foreign exchange risk, interest rates, market failures, Regional Economic Outlook: Europe, regulatory and supervisory frameworks, sovereign debt, sustainable growth, the euro | 3 Comments »
Posted on January 21, 2010 by iMFdirect
By Marek Belka
(Version in ελληνικά)
What a difference a year makes. January 2009 marked 10 years since the introduction of the euro. That anniversary fell in the midst of the worst global financial crisis in the past half century.
The euro—and the European Central Bank—proved important safeguards against the spread of the crisis. Countries whose currencies would likely have been subject to severe market gyrations had they not been part of the eurozone held their ground. And the ECB used innovative approaches, along with central banks around the world, to help provide liquidity and calm markets.
But as the crisis progressed, it became clear that the eurozone countries were affected in very different ways.
Markets took notice and the premia charged on sovereign bonds diverged. This month, as the euro turns 11 and even as the crisis is receding and an economic recovery is underway, prominent commentators—including Martin Wolf and Paul Krugman—are concerned that the strains within the eurozone are serious, and will need serious attention.
Filed under: Economic Crisis, Europe, Financial Crisis, Financial regulation | Tagged: Ashoka Mody, Edda Zoli, European Central Bank, eurozone, Financial Stability framework, Ireland, Labor, Paul Krugman, SGP. Martin Wolf, Silvia Sgherri, Spain, the euro | Leave a Comment »
Posted on January 17, 2010 by iMFdirect
By Marek Belka
Much is riding on getting the timing of the exit right from the stimulative policies used to combat the global economic and financial crisis. This is something that IMF Managing Director Dominique Strauss-Kahn has repeatedly emphasized. Exiting too early may jeopardize the recovery. But exiting too late may sow the seeds for the next crisis, as Wolfgang Munchau and others have argued recently. I also agree with Jean Pisani-Ferry and his colleagues that exiting in an uncoordinated fashion will lead to a renewed build up of financial instability.
To successfully unwind the extraordinary policy measures taken in response to the crisis, we need more than just a good sense of the state of the economic recovery and the degree of financial stability. We also need to know to what extent the global economy currently is influenced by those supportive policy measures. Is it safe yet to change course?
Filed under: Advanced Economies, Economic Crisis, Europe, Financial Crisis, Financial regulation, Fiscal Stimulus, growth | Tagged: bank lending, Banking crisis, eastern Europe, ECB, Europe, European Central Bank, fiscal policy, Fiscal Stimulus, G-20, Jean Pisani-Ferry, Lucas Papademos, recovery, the euro, unemployment, Wolfgang Munchau, World Economic Outlook | Leave a Comment »