Peterson Institute for International Economics

Roubini Topic Archive: Banks

  • Despite Its Troubles, the Euro Area Is Making Progress

    Yes, the headlines from the euro area are discouraging. The region’s Purchasing of Managers Index (PMI) is falling again—to 45.9 in May, with even German levels down. The European stock markets are down. The euro has slid to 1.25 vs. the dollar, accelerating preparations for a Greek euro exit. No resolutions of the political crisis […]

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  • Implementing Basel III in the European Union: A Deeply Flawed Compromise

    By all accounts, EU member countries have for months been debating how to implement the minimum bank capital standards agreed under Basel III. Their arguments have unfolded as the EU works to complete its fourth Capital Requirements Directive (CRD4) and its Capital Requirements Regulation (CRR); (see Véron 2012). Three issues have been contentious: (i) whether […]

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  • Endgame in Greece: Don’t Look for an Imminent ‘Grexit’

    As the countdown toward a new Greek election heads toward June 17, most analysts predict an imminent Greek exit from the euro area. Almost anything can happen, but a few possibilities are worth considering. Any newly elected Greek government will have trouble implementing the current austerity program called for by euro leaders and the International […]

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  • Is Europe Ready for Banking Union?

    Systemic fragility in the European banking sector predates the Greek fiscal crisis. It was revealed by the subprime/Lehman shock of 2007–08, and has never been properly addressed since then in spite of successive stress tests. In recent weeks, several senior policymakers have become more explicit on the need for a banking union—in other words, a […]

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  • Can Microcredit Lenders Fill the Gap?

    The Chinese press is full of stories documenting the difficulties small and medium enterprises (SMEs) have obtaining financing. Contrary to popular belief, the problem is not that SMEs are being crowded out by large enterprises. The SME share of total business loans has been relatively stable in the past several years. Moreover, the pace of […]

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  • A New Era for Global Financial Standards

    Even as headlines remain dominated by the euro area crisis, the financial world is transforming itself along multiple other dimensions. One intriguing but so far little-noticed development is the gradual shift in the role of global financial standard setters, which are becoming more assertive in looking at how their standards are adopted and implemented around […]

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  • The European Union Has Not Yet Solved Its Banking Problem

    The chaos that followed Lehman Brothers’ collapse two years ago hit financial systems in the United States and Europe with similar violence. But the consequences were not symmetrical. Several large financial institutions disappeared in the United States, partly because of stringent disclosure requirements, leading to immediate restructuring of the financial landscape. In the spring of 2009, public “stress tests” forced weaker banks to recapitalize, and soon the institutions at the core of the US financial system started regaining investors’ confidence, in spite of much pain still to come among smaller local banks. The United States faces major economic and social challenges, but its financial crisis appears to have essentially ended more than a year ago.

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  • Bond Markets, 2; Eurozone Laggards, 0

    This week, the eurozone’s “new normal” played out as a textbook example of how short-term market concerns can have a constructive impact on Europe’s long-term economic future. Under increasing political and economic pressure from rising bond market spreads, the Irish and Portuguese governments finally “did the right thing” and took productive policy actions. The eurozone’s “new normal” (discussed here) is working as intended.

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  • A Disappointing Agreement in Basel

    Morris Goldstein says the September 12 accord in Basel on new rules for bank capital reserves falls short of the goal of safeguarding the system against future crises. Edited transcript, recorded September 13, 2010. © Peterson Institute for International Economics. Steve Weisman: Global banking regulations are again in the headlines. This is Steve Weisman at […]

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  • Europe’s Stress Tests: Not Reassuring

    Morris Goldstein finds that the stress tests announced July 23 indicate a reluctance in Europe to admit the seriousness of the banks’ difficulties.

    Steve Weisman: How reassuring have the European bank stress tests been to those concerned about the stability and health of the European banking system? This is Steve Weisman at the Peterson Institute for International Economics with Morris Goldstein of the Institute, senior fellow here who’s been looking at the stress tests that were out today, July 23. Morris, thanks for joining me.

    Morris Goldstein: Delighted to be here, Steve.

    Steve Weisman: So should we be reassured by these stress tests?

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