New survey on “Banking Market Competition and Interest Rate Pass-Through”

Banking Competition and Interest Rate Pass-Through (with S. Kleimeier), in: Bikker, J.A. and L. Spierdijk (eds), Handbook of Competition in Banking and Finance, Cheltenham (Edgar Elgar), 2017: 305-322.

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Keynote Lecture on Retail Banking Market Integration and Financial Stability in the Eurozone

In my Jean Monnet keynote lecture on the International Conference on Banking and Finance at the University of Warsaw on 10 July 2017, entitled “Whatever it takes: Retail Banking Market Integration and Financial Stability in the Eurozone”, I have highlighted the role of retail banking market integration for turning a still incomplete European Monetary Union into a more stable currency union.

The main message of the lecture is that retail banking market integration goes some way to provide more urgently needed risk sharing in the Eurozone, yet this might not be enough for two major reasons. First, the Banking Union is still incomplete. In particular, a single European fiscal backstop for the single resolution mechanism and the still lacking European deposit insurance is required. Secondly, given the empirical evidence on the reluctance of retail banking markets to integrate, additional public risk sharing is needed. Ultimately some fiscal solidarity in the Eurozone is necessary to make the monetary union sustainable.

Posted in deposit insurance, Euro crisis, financial stability, fiscal policy, retail banking | Tagged , ,

Deposit Insurance in Times of Crises: Safe Haven or Regulatory Arbitrage?


An updated version of this paper has been presented on the 2017 Biennial IADI Research Conference: Designing an Optimal Deposit Insurance System – Theory and Practice, on 1-2 June 2017 at the Bank for International Settlements in Basel. See also here…

Posted in deposit insurance, financial crisis, global banking, retail banking, Uncategorized | Tagged , ,

Will a president Macron be able to reform the eurozone?

European financial markets are already betting on the victory of centrist French presidential candidate Emmanuel Macron in the country’s May 7 second-round election.

Are investors right to believe that the eurozone – the monetary union of countries that have incorporated the euro as their national currency – will gain new momentum with Macron in the Élysée Palace?

In this piece, written for The Conversation, I argue that Macron will have better chances to reform the Eurozone by pushing for a rebalancing of Eurozone governance rather than advocating “to set up a common eurozone treasury with a single finance minister”.

Instead, while in some areas centralization is needed to ensure stability, in particular with respect to a central bank that can effectively backstop financial crises and a full banking union, it might be advisable to renationalize fiscal policy.

The reasons are twofold: First, the political chances to install a European finance minister are minimal. Therefore, there is a high risk that Mr. Macron might achieve little or no progress in his term, eventually increasing the chances for populist in the next presidential election. Second, giving back full control over the budget to the national authorities also means transferring back the responsibility for solid finances and replacing the various fiscal pacts, which never have really worked.

Of course, this may require to reduce the debt overhang of the past. But by doing it, this would give more room for a sustained Eurozone recovery and – eventually – even more widespread support for new Eurozone-wide fiscal mechanism for burden sharing. Read more… 

Posted in Euro crisis, Europe, fiscal policy | Tagged , , ,

Finally, some good economic news from the Eurozone – but will it last?

Finally, good news from the Eurozone. Unemployment rates fell to 9.5% in February 2017. According to Eurostat, this is the lowest rate since May 2009. The 19 countries that have adopted the common currency are thus returning back to the unemployment level they experienced before the outbreak of the Eurozone crisis. In the last 12 months, the Eurozone recovery has lifted 1.25 million people out of unemployment.

This long-awaited decrease in unemployment is highly welcome; every person back in work is good news, even though it took nine years to recover. Yes, many economists believe that the recovery could have been faster with much less pain if there had been less initial emphasis on austerity and less reluctance “to do what it takes” at the ECB before Mario Draghi made that move in 2012. But that said, the Eurozone must now look forward.

So, is the worst over? Is wealth and prosperity – the ultimate promise of the EU to its citizens – finally coming back to the Eurozone? And is the fragility of the Eurozone that brought the crisis and the dramatic rise in unemployment a thing of the past?

In this piece, written for LSE EUROPP, I will argue that much more needs to done to return to the pre-crisis level and to make the European Monetary Union waterproof against future shocks. Read more…

Posted in Euro crisis, Europe, financial crisis, financial stability | Tagged , , ,

Impressions from the Jean Monnet Workshop “Financial Globalization and its Spillovers”

Copyright:Heike Fischer /TH Köln” 

Links to the videos of the keynote speeches by Benoît Cœuré and Barry Eichengreen and the subsequent panel discussions can be found here. Moreover, links to the workshop website, the speeches and some foto impressions can also be found here. The event has been listed by Reuters as Top Economic Event.

Posted in Euro crisis, Europe, financial globalization, financial stability, Uncategorized | Tagged , , ,

Benoît Cœuré on Euro Area Exit Options

Reuters titles “Letting countries leave euro zone would break ECB policy: Coeure” in their coverage of the event  “25 Years after Maastricht: The Future of Money and Finance in Europe“, held at Maastricht University on February 16, 2017, which was part of the Jean Monnet Workshop “Financial Globalization and its Spillovers“. Benoît Cœuré is Member of the Executive Board of the European Central Bank, and participated as a keynote speaker and a panelist in the event.

Posted in Euro crisis, Europe, financial crisis, financial globalization, financial stability, Uncategorized | Tagged , , ,