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ECB-Watch's blog

Sharon Bowles: once abused, forever abused

March 4, 2013 Comments (0)

Sharon Bowles, Lib Dem MEP for South East England, was remarked has one of 100 people to watch by Times. We have been watching since prior to this bombastic announcement, and it was not good. Recently, she advertised herself as a 'woman and outsider' in the race for governor of BOE. The outcome? She was ousted. But more to the point, as we discuss below, she is no poster woman for gender equity, and no outsider. All matters pertaining to EU financial regulation and the ECB come to the...

Banking union fallacies 5 - Draghi: 'capital control encouraged by Nat Supervisors'. Is DG MARKT complicit?

September 14, 2012 Comments (0)

According to FT, Mari Draghi, tells us that 'national supervisors' are imposing capital controls on the banks in their jurisdictions to underscore 'national bias' in financial regulation. A similar scenario was imagined by Daniel Gros from CEPS—'who developed original plans for EMU—in promoting a banking union in general, and ECB supervision of banks in particular. DG Jonathan Faull was kind enough to refer us to a DG MARKT document dated February 2012 on capital controls...

Hasty generalization from EZ by National Post on QC separatism

September 3, 2012 Comments (0)

David Frum makes some valid points about the consequences of QC separatism while staying within a CAD union, given the hindsight of EZ’s failure (National Post). But he overplays it by tying the fates of failing countries in the EZ to that of QC under that option. Having its own currency, OTOH, is presented as yet another calamity. Neither of these doom predictions are fatalities because QC  starts from a reasonably good standing  and its options are open.Read more »

Musings in central banking 3 - Challenge to MMT (continued)

August 17, 2012 Comments (0)

I respond here to Mitch Green's reasons (methodological) for rejecting my challenge to MMT and his invitation to 'try this again, but do so with good assumptions, a realistic model'. I took up his invitation to try again, although without altering assumptions. I show why the challenge is crucial to validate a key claim by MMT and why my model assumptions suffice to that purpose. Read more »

Banking union fallacies 6 - Capital control: lying or breaking the law

August 17, 2012 Comments (0)

Wolfgang Münchau tells us that because we can't impose capital controls, the only way to fight bank runs is through an EU-wide pooling of deposit insurance. Draghi, OTHO, tells us that 'national supervisors' are imposing capital controls on the banks in their jurisdictions to underscore 'national bias' in financial regulation; a scenario imagined by Daniel Gros from CEPS—'who developed original plans for EMU—in promoting a banking union? Are national supervisors breaking...

Hans Werner Sinn, a bird's eye view of 1994—2012

August 14, 2012 Comments (0)

Hans Werner Sinn has been devoted to addressing the big challenges that define our era. An early EU federalist, his writings ring true in hindsight on financial risk, the Euro and the environment.  Read more »

Banking union fallacies 4 - Draghi to be inducted 'supreme leader'

August 14, 2012 Comments (0)

The EU is in the process of creating ‘banking union’. The finalized plan is due September 11th. These are the topics we expect it should clarify: 1. Migration of banking supervision from national to EU 2. ESM to recap banks 3. EZ wide deposit insurance 4. Insolvency regime. Cast: Draghi, Nicolas Véron (Bruegel), Sharon Bowles (EU Parl) Read more »

Musings in central banking 2: a challenge for MMT

August 11, 2012 Comments (0)

I recently wrote down my understanding of central banking, taking the reader from pure banking (PB) to the system we currently have—interbank rate set through open market (OM)—via the simpler set up in which the CB intervenes through the discount window (DW). The purpose was to demystify some aspects surrounding 'printing press' which tends to be used indiscriminately. I took aim at MMT's thesis that the 'government is not revenue constrained'. I am just an amateur, it...

Paul de Grauwe: 'ECB could and should save the Euro'; interrogations

August 6, 2012 Comments (0)

Paul De Grauwe, who is an eminent economist on EMU, thinks the ECB can save the Euro (VoxEU), and the idea is making headway.  At the same time, Barnier promises a banking union for 2013, that pools deposit insurance across all EZ states and puts the ECB in charge, its greatest expansion of power since its creation (Libé). Some pointers to help understand and questions about whether the taxpayer is getting a good deal of it. Reading our  tutorial on central banking may help (ECB-Watch). On the...

'Printing press' is charlatans' playground

August 2, 2012 Comments (0)

The central bank 'printing press': hyperinflation', 'government is not revenue constrained', or neither? Application to EMU: progressives' historic mistake as they don't read past the word 'welfare' in 'welfare for banks and their creditors' and therefore think it's a good thing. What Krugman never challenges: taxpayer bailout of bks. To date 40% of EU GDP RT @nytimeskrugman What Draghi didn't do nyti.ms/OmtRyJ — ECB-Watch (@ECB_Watch) July...