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1. Monetary Policy for the Climate? A Money View Perspective on Green Central Banking

Author:
Jakob Vestergaard
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Central banks can potentially influence the investment decisions of private financial institutions, which in turn will create incentives towards green technology adoption and development of lower emission business models. This paper examines how monetary policies can be deployed to promote a greening of finance. To guide the efforts, the paper mobilizes the Money View literature. This enables a comparative assessment of different monetary policy options. The main finding is that a promising way forward for green monetary policy is to adopt a strategy of expanding collateral eligibility through positive screening and widening haircut spreads to change relative incentives in favor of green over brown assets.
Topic:
Climate Change, Economics, Monetary Policy, Banking, and Green Transition
Political Geography:
Global Focus

2. 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

3. U.S. Trade policy under Trump

Author:
Peter Gibbon and Jakob Vestergaard
Publication Date:
07-2017
Content Type:
Special Report
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
A few weeks ahead of the Ministerial Conference of the World Trade Organization (WTO), to be held in Buenos Aires from 10 to 13 December, the international trade community is gripped with a mixture of angst, disbelief and despair. Although US President, Donald Trump, made radical statements during his presidential campaign – including the infamous statement that the “WTO is a disaster” [for the US] – few expected much of that to translate into actual policies when he was elected and appointed President. Yet, this is very much what has in fact happened over the past 10 months.
Topic:
International Affairs
Political Geography:
America

4. The West must allow a power shift in international organizations

Author:
Jakob Vestergaard and Robert Hunter Wade
Publication Date:
12-2013
Content Type:
Policy Brief
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
More than three years after the International Monetary Fund (IMF)'s governing body agreed to reform the organization's governance so as to better reflect the increasing economic weight of dynamic emerging market economies in the world economy, only microscopic changes have been made. Emerging market and developing countries (EMDCs) have become increasingly frustrated with Western states for clinging to their inherited power, in the IMF and other important international economic governance organizations. The emerging cooperation among the BRICS (Brazil, Russia, India, China, South Africa) – as seen in the advanced-stage negotiations to establish a Development Bank and a Contingent Reserve Arrangement – sends a “wake up and smell the coffee” call to the West, and the latter will carry a heavy responsibility for eroding global multilateral governance if it continues to drag its heels on the needed adjustments.
Topic:
Development, Economics, Emerging Markets, International Monetary Fund, Governance, and Reform
Political Geography:
Russia, China, India, South Africa, and Brazil

5. The World Bank and the Emerging World Order Adjusting to multipolarity at the second decimal point

Author:
Jakob Vestergaard
Publication Date:
04-2011
Content Type:
Working Paper
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
The voice reform process originated in the Monterrey Consensus, which was articulated at the United Nations International Conference on Financing for Development held in Monterrey on 22 March 2002. For several years after the Monterrey Consensus, progress in deliberations on voice reform in the governing bodies of the World Bank was modest. But the global economic crisis raised the urgency of reforming the Bretton Woods institutions in the eyes of most countries and the creation of a G20 Leaders Forum gave further impetus to the voice reform process.
Topic:
Economics, Globalization, International Cooperation, International Affairs, and World Bank
Political Geography:
United Nations

6. 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

7. Combating illicit financial flows from poor countries. Estimating the possible gains

Author:
Jakob Vestergaard and Martin Højland
Publication Date:
11-2009
Content Type:
Policy Brief
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
If the UN Millennium Development Goals are to be reached by 2015, development aid needs to be tripled – which is most unlikely. Instead, countries should unite in a concerted multilateral effort to combat illicit financial flows: for every dollar poor countries receive in development assistance, more than eight dollars are illegally transferred back to rich countries, most of it in order avoid local taxation. Effectively combating these illicit financial flows would generate more financial resources for development than foreign aid is likely to ever do – and help build a sustainable tax base in developing countries for the benefit of future development efforts.
Topic:
Corruption, Crime, and Economics
Political Geography:
United States, United Kingdom, Europe, London, Belgium, Switzerland, Ireland, and Luxembourg