Rethinking global economic governance in light of the crisis : new perspectives on economic policy foundations / edited by Richard Baldwin and David Vines.

Format:

Book

Contributor:

Baldwin, Richard.

Vines, David.

Language:

English

Subjects (All):

Globalization.

International economic relations.

Physical Description:

viii, 164 p.

Place of Publication:

London : Centre for Economic Policy Research, c2012.

Language Note:

English

Summary:

Banking is back in the headlines. From desperate efforts by governments to address the Eurozone crisis to the "Occupy Wall Street" movement that is currently spreading across the globe, banks are again at centre stage. This new VoxEU.org book presents a collection of essays by leading European and US economists that provide solutions to the financial crisis and proposals for medium- to long-term reforms to the regulatory framework in which financial institutions operate. Key proposals include: -- European Safe Bonds (ESBies): Critical of Eurobonds, the authors propose an alternative solution in the form of "European Safe Bonds" (ESBies) -- securities funded by currently outstanding government debt (up to 60\% of GDP) that would constitute a large pool of "safe" assets. The authors argue that ESBies would address both liquidity and solvency problems within the European banking system and, most critically, help to distinguish between the two. -- Capital and liquidity requirements -- risk weights are crucial: While ringfencing might be part of a sensible regulatory reform, it is not sufficient. Capital requirements with risk weights that are dynamic, counter-cyclical and take into account co-dependence of financial institutions are critical, and one size does not necessarily fit all. Similarly, liquidity requirements have to be adjusted to make them less rigid and pro-cyclical. While banks are currently under-taxed, the currently discussed financial transaction tax would not significantly affect banks' risk-taking behaviour and might actually increase market volatility; in addition, its revenue potential could also be overestimated. -- The need for a stronger European-wide regulatory framework: If the common European market in banking is to be saved -- and the authors argue that it should be -- then the geographic perimeter of banks has to be matched with a similar geographic perimeter in regulation, which ultimately requires stronger European-level institutions.

Contents:

Intro

Contents

Foreword

Introduction

The G20MAP, global rebalancing, and sustaining global economic growth

Fiscal consolidation and macroeconomic stabilisation

The Eurozone crisis - April 2012

The Triffin Dilemma and a multipolar international reserve system

Financial stability: Where it went and from whence it might return

The crisis and the future of the banking industry

How to prevent and better handle the failures of global systemically important financial institutions

Cross-border banking in Europe: Policy challenges in turbulent times

Credit default swaps in Europe*

Global banks, fiscal policy and international business cycles

The Doha Round impasse

The Future of the WTO

Open to goods, closed to people?

The recession and international migration

A dangerous campaign: Why we shouldn't risk the Schengen Agreement.

Notes:

Bibliographic Level Mode of Issuance: Monograph

Includes bibliographical references.

ISBN:

1-907142-46-0

OCLC:

928634292