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Tag Archives: Finance & Financial Regulation

What Are the Effects of the ECB’s Negative Interest Rate Policy?

This paper explores the potential effects (and side effects) of negative rates in theory and examines the evidence to determine what these effects have been in practice in the euro area. Several central banks, including the European Central Bank since 2014, have added negative policy rates to their toolboxes after exhausting conventional easing measures. It is essential to understand the effects on the economy of prolonged negative rates. This paper explores the potential effects (and side...

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Banks in a net-zero Europe

A net-zero emissions target is a powerful incentive for the low-carbon transition, but for bank supervisors, climate-related risks, not climate outcomes, should remain the focus. Europe’s climate law, agreed in April, will have knock-on effects through a wide range of sector-specific legislation, with the intention of delivering on European Union states’ collective commitment to emission reduction targets and a net-zero economy in 2050. Globally, 32 countries have such targets in law or...

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Crypto… mania

Cryptocurrencies are here to stay but are unlikely to be considered a credible alternative to money anytime soon. This opinion piece is forthcoming in the Money Review section of Kathimerini and El Economista. Cryptocurrencies are here to stay. Coin Market Cap, a popular information site on all things crypto, lists close to 10,000 of them. The name suggests that they are currencies and most of them are, in that they have a value and are accepted as a means of payment. But they cannot be...

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Bruegel annual report 2020

The Bruegel annual report provides a broad overview of the organisation's work in the previous year. The annual report includes an overview of Bruegel’s research, governance and financial statements, and takes stock of Bruegel’s accomplishments and impact during 2020. Bruegel will continue to work to develop a proactive European strategy to deal with all the challenges ahead, providing free and open access to its research.

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Accounting for climate policies in Europe’s sovereign debt market

Sovereign debt will be vital in stimulating sustainable investment, but information is lacking on how green public spending actually is. The authors are grateful for very helpful comments from Moritz Krämer, Patrice Cochelin and Paul Munday in the context of a related project, undertaken with Stavros Zenios. International debt investors increasingly demand assets that are aligned with environmental, social and governance objectives. Sovereign debt is being belatedly swept up in this...

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Confronting the risks: corporate debt in the wake of the pandemic

As European economies emerge from lockdowns, it is becoming clearer that corporate debt has reached critical levels. A new French scheme, in which the state guarantees portfolios of subordinated debt, shows how financial support could be targeted better. Publicly guaranteed credit and moratoria have been the main instruments used by governments to support companies during the pandemic. By the end of 2020, €318 billion in loans was subject to moratoria according to the European Banking...

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Central bank currencies going digital

Electronic cash might be the future, but it is still unclear what payment innovation it offers for the public, certainly in the euro area. And it is unlikely to fully replace the comfort the consumer feels in having money under the mattress. This opinion piece was originally published in the Money Review section of Kathimerini and is forthcoming in El Economista. Central banks often update the money they issue to include new features. The next update will be to introduce a digital version...

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New EU insolvency rules could underpin business rescue in the COVID-19 aftermath

Corporate bankruptcies are set to rise in the context of COVID-19. EU countries should speed up adoption of recent insolvency reforms and, in addition, offer consistent treatment to restructuring finance. One of the less-remarked consequences of the COVID-19 crisis, the associated lockdowns and the unprecedented collapse in demand experienced by some companies, has been a dramatic fall in business defaults and insolvencies. In a normal year, just under 200,000 insolvency proceedings are...

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Central banks don’t have to pick winners and losers to fight climate change

Disclosures and financial regulation don’t get enough respect as tools to reduce emissions. Suddenly central banks are in the middle of the climate-policy debate and it always seems to zoom in on one question: Should they stop buying “brown” bonds? Either yes, and the traditional inflation-fighting mandate goes out the window, or no and the central bank is leaving the planet to burn. The truth is, there is a lot that the European Central Bank, the Federal Reserve and other global leaders can...

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Financial services: The Brexit dust begins to settle

The phase of greatest Brexit-related uncertainty for the European financial sector ended on 1 January. Although too early to discern more than the broadest contours of the future landscape, it is increasingly apparent that London will be less dominant than before. The Brexit story has entered a new phase. The United Kingdom’s exit from the European single market on 1 January was orderly in the financial sector, despite significant shifts of liquidity in shares and derivatives, and unlike the...

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