This paper, also downloadable from the Bruegel website, was initially prepared for a joint conference of the Peterson Institute and the CF40 (China Finance 40) Forum in Beijing on April 13-14, 2013, and published in the conference volume. It is meant as a preliminary basis for future research and tentatively explores the role of non-bank credit in financial systems beyond the focus on "shadow banking". Specifically in the US, the unique development of non-bank credit channels appears correlated with higher systemic resilience, in contrast with bank-dominated Europe.
This policy note was published last Friday by the European Parliament in anticipation of their "Monetary Dialogue" hearing of ECB President Mario Draghi yesterday (other papers prepared for the same occasion are here). It was republished today by Bruegel and the Peterson Institute in their respective policy series. The content of the three versions (European Parliament, Bruegel, and PIIE) is identical.
In the note, Guntram Wolff and I provide an in-depth analysis of the sequence defined by the
European Council in mid-December to complete Europe’s banking union, starting
from the first step of creating a Single Supervisory Mechanism (SSM) hosted by
the European Central Bank. We make specific recommendations on the successive
steps, including the finalization of the SSM Regulation, other pieces of EU
legislation (Capital Requirements Regulation, Bank Recovery and Resolution
Directive, Deposit Guarantee Schemes Directive), the operational framework that
will enable the European Stability Mechanism to recapitalize banks directly,
the future “Single Resolution Mechanism” that is intended for discussion later
this year and in 2014, and further steps at an even later stage.
We also make the point that policymakers should take
decisive action to restore trust in the European banking sector before the
Single Resolution mechanism is finalized, because the economic cost of waiting
at least 18-24 more months would be simply too high. Article 27(4) of the SSM
Regulation in particular provides a unique opportunity for a proactive,
system-wide initiative for the assessment and restructuring of Europe’s banks
in late 2013 / early 2014.
The note was presented to the press this morning. Click here to listen to the conversation as recorded on the Peterson Institute's website.
On October 4, I was invited to present a
briefing paper at a meeting of the Economic and Monetary Affairs (ECON) committee of the European Parliament, in preparation of their hearing of European Central Bank President Mario Draghi the following week. the paper is about the European initiative to create a banking union and more specifically the European Commission's proposals for A Single Supervisory Mechanism and related reform of the European Banking Authority, published on September 12.
Bruegel later published a lightly edited version of the same paper in its Policy Contribution series, available here. The paper is also available on the European Parliament's website.
Earlier this week Bruegel published this paper in which Jean Pisani-Ferry, André Sapir, Guntram Wolff and I discuss the key policy choices associated with the vision of a European Banking Union, and outline the possible steps that can be taken in that direction.
I contributed this article to a forthcoming book co-edited by Barry Eichengreen (UC Berkeley) and Bokyeong Park (KIEP). The piece attempts to assess the financial reform induced by the crisis so far, and to see the forest for the trees - a challenging task given the multiplicity of reform initiatives and the unfinished nature of most of them.
Click here for the version published in the PIIE Working Paper series.
Click here for the version published in the Bruegel Working Paper series.
Bruegel just published this Policy Contribution co-authored with Guntram Wolff, at the request of the European Parliament. Building on my earlier piece on credit rating agencies, we examine a series of policy questions specifically related to sovereign credit ratings and their role in financial policy.
This policy contribution was simultaneously published by Bruegel and published by the Peterson Institute. In it, I summarize the European debate on credit rating agencies, the problems they pose and some possible solutions. I warn against the unintended consequences of ill-designed regulation, and suggest that the most important issue in this debate is to improve the quality and scope of issuers' public disclosures about their financial risk factors.
This is published with much delay, due to technical problems with TypePad. In July Bruegel and the Peterson Institute published my policy brief on the future of International Financial Reporting Standards (IFRS), in which I make policy recommendations as regards both the governance of the IFRS Foundation and the implementation of the standards in individual jurisdictions.
Once again, I responded to a public consultation on how to reform the governance of the IFRS Foundation, which hosts the International Accounting Standards Board - this time in response to a consultative report of the Foundation's Monitoring Board, currently composed of a limited number of public authorities. This follow my response last month to another consultation, by the Foundation's own Trustees.
It is a somewhat specialized debate, but if you have a taste for the politics of accounting you will certainly enjoy it.
My letter was posted by the Monitoring Board on the IOSCO website. Click here for a PDF version.