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151. Information Sharing and Cross-Border Entry in European Banking

Author:
Caterina Giannetti, Nicola Jentzsch, and Giancarlo Spagnolo
Publication Date:
02-2010
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
Asymmetries can severely limit the cross-border border expansion of banks, if entering banks can only obtain incomplete information about potential new clients. Such asymmetries are reduced by credit registers, which distribute financial data on bank clients. Asymmetrically distributed information and adversely selected pools of borrowers constitute severe barriers for foreign banks when they enter new markets. In many instances, these problems force banks to either form 'alliances with incumbents' or simply enter through mergers and acquisitions (M). Yet such entry modes do not automatically lead to intensified competition as they may leave the number of competitors unchanged. Thus, institutions that reduce information asymmetries in credit markets (thereby encouraging entry through branches) may be very important if the objective is strengthening competition in addition to market integration. Recently, these institutions – credit registers – have received greater attention among academics and policy-makers in Europe, although there is still a remarkable lack of understanding of their empirical impact on banking.
Topic:
Economics, International Trade and Finance, Markets, and Monetary Policy
Political Geography:
Europe

152. Crisis in the eurozone and how to deal with it

Author:
Paul De Grauwe
Publication Date:
02-2010
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
The crisis that started in Greece culminated into a crisis of the Eurozone as a whole. How did we get into this mess? To answer this question it is useful to distinguish the three actors that have played a role in the development of the crisis: Greece, the financial markets (including the rating agencies) and the eurozone authorities. Let us analyse the role of these three actors in the drama.
Topic:
Economics and Markets
Political Geography:
Europe and Greece

153. The Impact of the Crisis on the Real Economy

Author:
Daniel Gros and Cinzia Alcidi
Publication Date:
01-2010
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
This crisis was caused by a combination of asset price bubbles, mainly in the real estate sector, and a credit bubble that led to excessive leverage. This is wellknown. What is less well-known is that on both accounts the euro area was affected by both 'bubble' symptoms as much as the US.
Topic:
Economics, Markets, and Financial Crisis
Political Geography:
United States and Europe

154. Hope Floats

Author:
John H. Makin
Publication Date:
04-2010
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
January ended on a note of diminished hope for a sustainable global recovery as stock markets retreated from their midmonth highs. Since mid-February, however, higher hopes for a sustainable global recovery have returned. Equity markets have rallied along with markets for corporate and global sovereign bonds. Some mitigation of perceived risks facing global investors has provided a chance for hope to “float up,” and it has done so. Tension over the cohesion of the European Monetary Union and, in particular, concerns over a possible sovereign-debt default by Greece have eased, and investors continue to hope that the debt problems in Greece will not spread to the rest of Europe.
Topic:
Economics, International Political Economy, International Trade and Finance, Markets, and Financial Crisis
Political Geography:
Europe and Greece

155. The Year Ahead

Author:
John H. Makin
Publication Date:
01-2010
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
We can expect 2010 to be a volatile year. This likelihood is underscored by looking back at 2008 and 2009. Two thousand eight was a highly volatile year leading up to the collapse of Lehman Brothers in September, which was followed by the risk of a total systemic meltdown. That sharp and obvious risk spike prompted massive policy responses that were simply the largest that central banks, with rate cuts and liquidity provision, and governments, with tax cuts and spending increases, could manage. The result—beginning in March 2009—was a linear rise in the prices of risky assets, the result of massive relief once the slip into a global depression had been averted and the acute phase of the crisis in the financial sector had passed.
Topic:
Economics, International Trade and Finance, Markets, and Financial Crisis
Political Geography:
United States, Japan, China, and Europe

156. The Transatlantic Economy 2010 Annual Survey of Jobs, Trade and Investment between the United States and Europe

Author:
Daniel S. Hamilton and Joseph P. Quinlan
Publication Date:
01-2010
Content Type:
Book
Institution:
Center for Transatlantic Relations
Abstract:
Despite the recession, the United States and Europe remain each other's most important foreign commercial markets. No other commercial artery in the world is as integrated and fused as the transatlantic economy. We estimate that the transatlantic economy continues to generate close to $4.28 trillion in total commercial sales a year and employs up to 14 million workers in mutually “onshored” jobs on both sides of the Atlantic.
Topic:
Economics, International Trade and Finance, Markets, and Bilateral Relations
Political Geography:
United States and Europe

157. Product Market Reforms in EU Countries: Are the methodology and evidence sufficiently robust?

Author:
Jacques Pelkmans
Publication Date:
07-2010
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
In the EU of today, economic policies, competition policy and regulation are expected to be 'evidence-based'. The purpose of the present paper is to discuss critically the most prominent empirical approach to the measurement of regulation: the OECD product market regulation (PMR) indicators. The paper sets out what exactly product market reforms are and the empirical regulatory indicators that have been developed by the OECD, the World Bank and others.
Topic:
Markets and Financial Crisis
Political Geography:
Europe

158. Europe 2020 and the Financial System: Smaller is beautiful

Author:
Karel Lannoo
Publication Date:
07-2010
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
Meeting Europe's 2020 objectives of smart, sustainable and inclusive growth is even more of a challenge for the financial sector than for the EU as a whole. Smart, sustainable and inclusive growth is just the opposite of what the financial sector stood for, and how it continues to be perceived by the public. The huge regulatory agenda that is on the table should tame the financial sector, but whether it will help it to meet the Europe 2020 objectives is an open question (see European Commission, 2010a).
Topic:
International Trade and Finance, Markets, Regional Cooperation, and Financial Crisis
Political Geography:
Europe

159. From National to European Regulation: Towards European Financial Supervisory Authorities

Author:
H. Onno Ruding
Publication Date:
05-2010
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
Financial reform is needed now in the EU not only to reduce the likelihood of another financial crisis in the coming years but also to reinforce the internal market. A primary financial as well as political goal should be to create a truly single market in Europe for financial services and institutions. The current state of affairs is, however, still too far removed from this goal.
Topic:
Economics, Markets, and Financial Crisis
Political Geography:
Europe

160. Regulatory Challenges for the EU Asset Management Industry

Author:
Karel Lannoo
Publication Date:
04-2010
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
The European asset management industry is feeling squeezed from all sides, as a result of growing prudential, product and conduct regulation. A new Directive, UCITS IV, has only just been enacted, and already new challenges are emerging in the regulation of hedge and venture capital funds, the review of the regulatory regime for depositaries (or financial custodians) and amendments to the MiFID Directive.2 In addition, a new European supervisory framework is in the making, which implies much stricter controls on enforcement. These changes are taking place in the context of one of the largest declines suffered by the industry in the last two decades, from which many fund managers have not yet recovered. The era of light regulation is thus definitely over.
Topic:
Markets, Monetary Policy, and Financial Crisis
Political Geography:
Europe