While the eyes of the world are now focused on the measures that the various governments have taken to protect their banking systems, attention to the causes of the current crisis seems to have shifted to the background. However, this crisis should be seized as an opportunity to provide the financial system with structural improvements, because once the crisis is over politicians will no longer perceive any need for improvements. Improvements concern financial supervision as well as the collaboration among countries in a situation of international financial unrest. They also concern, in my opinion, a change in the system of rating the creditworthiness of financial institutions.
Some Arguments against a European Fund to Bail out Troubled Banks by Roel Beetsma University of Amsterdam, CEPR and CESifo As the details of Paulson’s rescue plan for troubled U.S. banks are being negotiated, some experts are now calling for Europe to set up a similar fund for helping banks that have become the […]
The Economic Policy Committee and European Commission (2006a,b) projects an average increase by 2050 in ageing-related expenditures of at least 5 percentage points of GDP in half of the EU Member States. , If these were to be financed from current tax revenues, statutory tax rates would have to increase by at least 8 to […]
by Roel Beetsma (University of Amsterdam, CEPR, CESifo) and Sylvester Eijffinger (Tilburg University, CEPR, CESifo) Although the current credit crisis has (so far) only had a limited impact on the European financial sector, there is still a need to restructure European financial sector supervision. Currently, the responsibility for financial supervision is at the national level. […]
Although Europe’s Stability and Growth Pact (SGP) requires countries to pay fines for repeated violations of the 3% deficit/GDP norm, so far no country has paid a fine and most experts doubt that this will ever happen. Indeed, they generally view the SGP as an instrument through which countries can impose peer pressure on each […]