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Articles 1 - 19 of 19
Full-Text Articles in Macroeconomics
Eurozone: Pandemic Emergency Purchase Program, Corey N. Runkel
Eurozone: Pandemic Emergency Purchase Program, Corey N. Runkel
Journal of Financial Crises
The COVID-19 pandemic quickly engulfed the European Union's economy in 2020. As investors sought safe assets, marketable debt yields rose dramatically. To lower the cost of borrowing, the European Central Bank (ECB), alongside the 19 national central banks (NCBs) that comprise the Eurosystem, purchased marketable debt in secondary markets. Asset eligibility mirrored that of the ECB's Asset Purchase Program (APP), an ongoing quantitative easing program which the ECB expanded during the pandemic. The main difference was that the PEPP allowed debt issued by Greece, which did not have an investment-grade credit rating. The rate that the PEPP purchased securities within …
European Central Bank: Fine-Tuning Operations, Corey N. Runkel
European Central Bank: Fine-Tuning Operations, Corey N. Runkel
Journal of Financial Crises
Credit in the European interbank market tightened in August 2007 as banks sustained losses in mortgage-backed securities markets. On August 9, the European Central Bank (ECB) announced a EUR 95 billion fine-tuning operation (FTO). The Eurosystem continued providing FTOs carrying overnight maturities through the next three business days. Two more bouts of interbank funding stress—in March and September 2008—caused the ECB to deploy more FTOs. The ECB provided liquidity through 12 emergency, overnight FTOs, all but one at least EUR 25 billion in size. All operations, except the first and last, used variable-rate, fixed-allotment auctions. The first and last operations …
Spain: Deposit Guarantee Funds, Ezekiel Vergara
Spain: Deposit Guarantee Funds, Ezekiel Vergara
Journal of Financial Crises
On October 10, 2008, Spanish authorities increased the amount insured under its three Fondos de Garantía de Depósitos (FGDs), Spain’s deposit-insurance schemes, from EUR 20,000 to EUR 100,000 (USD 27,200 to USD 136,000). By raising this limit, which was meant to be a permanent change to the banking system, Spanish authorities intended to bolster depositor confidence while exceeding a recent European Union (EU) recommendation to expand such coverage to at least EUR 50,000. Membership in one of the FGDs was compulsory for banks, cajas (savings banks), and cooperatives, each of which had a separate fund. These institutions paid a 0.2% …
Slovenia: Unlimited Deposit Guarantee, Ezekiel Vergara
Slovenia: Unlimited Deposit Guarantee, Ezekiel Vergara
Journal of Financial Crises
On October 7, 2008, as the European Union (EU) coordinated its members’ response to the Global Financial Crisis (GFC), its Economic and Financial Council (ECOFIN) recommended that member states raise their deposit-insurance coverage to at least EUR 50,000 (USD 67,000). Germany and Austria went further and adopted an unlimited guarantee of deposits. In response, Slovenia announced its Unlimited Deposit Guarantee on October 8, 2008. Slovenia’s national assembly adopted the program on November 11, 2008, effective November 20. The Bank of Slovenia (BoS) administered the program, as it had Slovenia’s existing deposit-insurance scheme. When an insured bank failed, fees were imposed …
Latvia: Deposit Guarantee Fund, Ezekiel Vergara
Latvia: Deposit Guarantee Fund, Ezekiel Vergara
Journal of Financial Crises
During the Global Financial Crisis (GFC), Latvian authorities raised the country’s deposit-insurance cap from EUR 20,000 to EUR 50,000 (USD 26,800 to USD 67,000) in response to international calls to bolster deposit-insurance systems. They passed the measure on October 16, 2008, and it came into effect two days later. The Financial and Capital Market Commission (FCMC), Latvia’s prudential supervisor and existing deposit administrator, oversaw the guarantee. The FCMC covered most types of deposit accounts and insured all Latvian-registered deposit-taking institutions, including some foreign-bank branches operating in Latvia. The FCMC charged quarterly premiums on insured accounts and could levy additional fees …
Greece: Hellenic Deposit Guarantee Fund, Lily S. Engbith
Greece: Hellenic Deposit Guarantee Fund, Lily S. Engbith
Journal of Financial Crises
Responding to general financial and economic volatility during the Global Financial Crisis (GFC), the Greek government in November 2008 sought to shore up public confidence in the banking system by raising the deposit-insurance limit from EUR 20,000 to EUR 100,000 (127,000 USD) per depositor for three years. The Hellenic Deposit Guarantee Fund (HDGF) was responsible for administering this adjustment, which was accompanied by a fivefold increase in the percentages used for calculating member institutions’ annual contributions. All credit institutions that were authorized to operate in Greece, including branches of foreign banks without their own coverage, were required to participate in …
France: Deposit Guarantee Fund, Ezekiel Vergara
France: Deposit Guarantee Fund, Ezekiel Vergara
Journal of Financial Crises
In October 2008, during the Global Financial Crisis (GFC), European Union (EU) officials urged member states to raise their minimum deposit-insurance coverage to at least EUR 50,000 (USD 68,000) to promote confidence in banks. France did not need to increase its deposit-insurance cap to meet this target, as it already guaranteed EUR 70,000. The following year, EU officials passed a directive that required all member states to permanently increase their minimum deposit-insurance coverage to EUR 100,000 by December 31, 2010. French authorities complied with the EU’s directive on September 29, 2010. The Fonds de Garantie des Dépôts (FGD), a private …
The Google Trends Uncertainty (Gtu) Index: A Measure Of Economic Policy Uncertainty In The Eu Using Google Trends, Luisa Weinberg
The Google Trends Uncertainty (Gtu) Index: A Measure Of Economic Policy Uncertainty In The Eu Using Google Trends, Luisa Weinberg
Undergraduate Economic Review
The objective of this research is to use Google search data to build the Google Trends Uncertainty (GTU) index, a weekly measure of uncertainty surrounding economic policy in the four largest economies in the European Union: Germany, France, Italy, and Spain. By obtaining the relative popularity of Google searches with economic policy uncertainty connotations given a specific timeframe and geographical area, the frequency with which people search for terms related to economic policy effectively serves as a proxy for actual economic policy uncertainty. In its entirety, the various elements of this research allow to accurately and unbiasedly measure economic policy …
The Hungarian Guarantee Scheme (Hungary Gfc), Alec Buchholtz
The Hungarian Guarantee Scheme (Hungary Gfc), Alec Buchholtz
Journal of Financial Crises
In the midst of the global financial crisis, in October 2008, the Magyar Nemzeti Bank (MNB), the Hungarian national bank, noticed a selloff of government securities by foreign banks and a large depreciation in the exchange rate of the Hungarian forint (HUF) in foreign exchange (FX) markets. Hungarian banks experienced liquidity pressures due to margin calls on FX swap contracts, prompting the MNB and Minister of Finance to seek assistance from the International Monetary Fund (IMF), the European Central Bank (ECB) and the World Bank. The IMF and ECB approved Hungary’s requests in late 2008 to create a €20 billion …
European Banking Union A: The Single Supervisory Mechanism, Rosalind Z. Wiggins, Michael Wedow, Andrew Metrick
European Banking Union A: The Single Supervisory Mechanism, Rosalind Z. Wiggins, Michael Wedow, Andrew Metrick
Journal of Financial Crises
At the peak of the Global Financial Crisis in fall 2008, each of the 27 member states in the European Union (EU) set many of its own banking rules and had its own bank regulators and supervisors. The crisis made the shortcomings of this decentralized approach obvious, and since its formation in January 2011, the European Banking Authority (EBA) has been developing a “Single Rulebook” that will harmonize banking rules across the EU countries. In June 2012, European leaders went even further, committing to a banking union that would better coordinate supervision of banks in the then 18-country Eurozone. A …
Ireland And Iceland In Crisis D: Similarities And Differences, Arwin G. Zeissler, Daisuke Ikeda, Andrew Metrick
Ireland And Iceland In Crisis D: Similarities And Differences, Arwin G. Zeissler, Daisuke Ikeda, Andrew Metrick
Journal of Financial Crises
On September 29, 2008—two weeks after the collapse of Lehman Brothers—the government of Ireland took the bold step of guaranteeing almost all liabilities of the country’s major banks. The total amount guaranteed by the government was more than double Ireland’s gross domestic product, but none of the banks were immediately nationalized. The Icelandic banking system also collapsed in 2008, just one week after the Irish government issued its comprehensive guarantee. In contrast to the Irish response, the Icelandic government did not guarantee all bank debt. Instead, the Icelandic government controversially split each of the three major banks into a new …
Given Today's New Wave Of Protectionsim, Is Antitrust Law The Last Hope For Preserving A Free Global Economy Or Another Nail In Free Trade's Coffin?, Allison Murray
Loyola of Los Angeles International and Comparative Law Review
No abstract provided.
Planning To Fail: The Eurozone, Its Sovereign Debt Crisis, And The Future Of The Union, Kyle Whitworth
Planning To Fail: The Eurozone, Its Sovereign Debt Crisis, And The Future Of The Union, Kyle Whitworth
Theses
The European Union has been one of the greatest accomplishments of modern history. Through economic and political integration has ended centuries of warfare on the continent while producing the worlds largest trading bloc. Despite the initial success of the monetary union and its single currency, the Union has been bogged down economic troubles in the form of a debt crisis among several of the member states. The recovery period of the crisis has produced growth that is slow and uneven. Countries such as Germany has assumed the role of the economic powerhouse of Europe and therefore a political leader in …
Why Ireland: How Bank Failure Was Their Key To Success, Nia R. Gillenwater
Why Ireland: How Bank Failure Was Their Key To Success, Nia R. Gillenwater
Claremont-UC Undergraduate Research Conference on the European Union
Despite Ireland’s status as the first EU country to receive a bailout, Ireland appears to be bouncing back extremely well from the ongoing financial crisis in Europe and the EU. Looking at recent Irish economic statistics it begs the question whether the government’s complete guarantee of all Irish debts was the best response. Ireland’s financial crisis seemed quite similar to America’s: for both the root causes are freely lending for real estate and property. The responses however, were very different. While America let Lehman Brothers fail and only provided a partial guarantee to its banks, Ireland provided a complete guarantee …
The Impact Of Market Perception On Sovereign Default Risk In The European Union, Keith Pendergrast
The Impact Of Market Perception On Sovereign Default Risk In The European Union, Keith Pendergrast
Senior Honors Projects, 2010-2019
The recent debt crisis in the European Union has resulted in the differential treatment of Greece’s debt due in large part to market perception. This is evident in the large differences in credit default swap spreads between Greece and other periphery countries in Europe. The goal of this thesis is to explore the differential treatment, and determine the magnitude of this difference. In order to do this, a fixed effect regression is implemented to first determine that a difference exists. Then, a perception index is created in order to determine the magnitude of the market perception. Using these methods we …
Examining Eurozone Divergence, Charles Noble
Examining Eurozone Divergence, Charles Noble
Economics Theses
This paper provides a brief history of European integration followed by an examination of the Eurozone financial crisis and the economic divergence among particular economies (Germany compared with Greece, Portugal, Spain, and Ireland) it induced. Afterwards a list of structural and policy reforms meant to achieve economic convergence is provided. The paper concludes that in order for the Eurozone to achieve economic convergence, it would be best if Greece and Portugal exited the monetary union. The smaller, more homogeneous union could then more readily achieve economic convergence to function, both politically and economically, as a sustainable monetary union.
Big Bang Vs. Gradualism, Lauren Sims
Big Bang Vs. Gradualism, Lauren Sims
Claremont-UC Undergraduate Research Conference on the European Union
No abstract provided.
Targeting Relative Inflation Forecast As Monetary Policy Framework For Adopting The Euro, Lucjan T. Orlowski
Targeting Relative Inflation Forecast As Monetary Policy Framework For Adopting The Euro, Lucjan T. Orlowski
WCBT Faculty Publications
This study proposes relative inflation forecast targeting as an operational framework of monetary policy for adopting the euro by the EU new Member States. This strategy assumes containing differentials between the domestic and the eurozone inflation forecasts as an operational target. A model prescribing the RIFT framework is presented along with a set of appropriate policy indicator variables and instrument rules. The proposed framework advances the strategy based on relatively strict inflation targeting that is currently pursued by some NMS. Several ARCHclass tests in various functional forms are employed for providing preliminary empirical evidence on convergence of inflation differentials relative …
Monetary Convergence And Risk Premiums In The Eu Accession Countries, Lucjan Orlowski
Monetary Convergence And Risk Premiums In The Eu Accession Countries, Lucjan Orlowski
WCBT Faculty Publications
This study examines the impact of various monetary policy regimes on the ability to lower inflation and exchange rate risk premiums in the EU accession countries as they undergo monetary convergence to the eurozone. It proposes a monetary policy framework of flexible targeting of relative inflation risk premium that is believed to be credible and useful for managing these two categories of risk. A model of inflation and exchange rate risk premiums within the context of inflation targeting is developed. Recent trends in these risk premiums in Hungary, the Czech Republic and Poland are tested by employing the threshold ARCH …