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Begin New Search Topic Financial Crisis Author Jakob Vestergaard

1. Central Banks Caught Between Market Liquidity and Fiscal Disciplining: A Money View Perspective on Collateral Policy

Author:
Jakob Vestergaard and Daniela Gabor
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Despite much attention to unconventional monetary policies after the financial crisis, the collateral policies of central banks are rarely discussed. And when they are, the haircuts applied to assets pledged to access central bank liquidity tend not to be analyzed. An exception to these trends is the recent work by Nyborg (2017), who argues that the collateral policies adopted by the European Central Bank (ECB) aggravated the sovereign debt crisis and put the survival of the euro at risk. Taking our point of departure in the money view literature (Mehrling 2011), we argue however that Nyborg’s critique of the ECB’s crisis response is misguided and that his proposal to deepen and reinforce the ECBs role in the fiscal disciplining of member states would be procyclical and destabilizing. Through our analysis of Nyborg’s work and the ECBs crisis response, we identify core principles for countercyclical collateral policies suitable for market-based financial systems.
Topic:
Monetary Policy, Financial Crisis, Finance, and Banking
Political Geography:
Global Focus

2. Reforming Global Banking Rules-how the G20 Can Save the Global Economy

Author:
Jakob Vestergaard, Ranjit Lall, and Martin Hojland
Publication Date:
06-2010
Content Type:
Policy Brief
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
At the September 2009 Pittsburgh Summit the leaders of the G20 set out a series of far reaching regulatory reforms to “tackle the root causes of the crisis and transform the system for global financial regulation”. The centrepiece of the reform effort was Basel III, a new set of capital adequacy rules to be drawn up by the Basel Committee on Banking Supervision (BCBS), a group of international banking regulators, by the end of 2010. As the G20 convenes in Toronto almost one year later, Basel III is entering a critical phase in the reform process – a phase which will determine whether we see fundamental reform of the international banking system or merely a return to 'business as usual'. Drawing on the experience of the previous attempt to overhaul global capital standards, Basel II, this DIIS policy brief proposes a set of institutional and structural reforms to the BCBS to ensure that it succeeds in realizing the G20's vision for a sounder and more resilient financial system.
Topic:
Financial Crisis
Political Geography:
Canada