Tuesday, 3 March 2020

Life outside the Euro—Monetary and financial issues for the EU periphery and beyond

Conference of the European Political Economy Project (In association with SEESOX)

St Antony’s College, 23 January, 2020

European countries that have not adopted the Euro face a complex set of issues regarding their interactions with those countries that have adopted it, and ultimately have to decide whether and when to join the Euro and the banking union (BU). Similarly, EU member states that have adopted the Euro face complex issues in their relationships with the non-Euro member states. The eight member states outside the Euro are economically and politically important. They have a total population of 105 million people, a significant number and more than any individual member state that has adopted the Euro. They range from among the richest to the poorest EU members.

On 23 January 2020 the European Political Economy Project (EuPEP) of the St. Antony’s European Studies Centre (ESC) hosted a conference that looked instead at monetary and financial issues for those countries that are not at the core, i.e. have not (yet) adopted the Euro—defined as the EU “periphery” in this context. Much research on EU integration looks at the “core” EU member states, defined here as those that have adopted the Euro as their currency, and focuses on them in analysing the speed and priorities for taking forward the European project. This conference sought instead to look at the policy choices and experiences of the countries at present not in the core.

Tuesday, 25 February 2020

How do monetary, micro- and macroprudential policies interact? Take-aways from an Austrian National Bank workshop

The global financial crisis provoked a wholesale reassessment of prudential policy and the framework within which it is conducted, and also led central banks to adopt very accommodate stances using an array of unconventional instruments. The Austrian National Bank (OeNB) workshop was an occasion to look back on the choices made in the wake of the crisis—especially choices about institutional structure, governance, and the coordination of policies—and to reflect on how our understanding of the interaction among monetary, microprudential, and macroprudential policies has evolved over the subsequent ten years. (Other financial sector policies such as consumer protection are important but less closely related to central banking.)

One reaction to the financial crisis was to give new prominence to macroprudential oversight, concerned with the stability of the (financial) system as a whole. New institutions were established and tools were created or adapted. (Prior to the crisis, macroprudential concerns centered on dollarization and to some extent rapid credit growth in emerging market countries.)

Another reaction, seen in many countries, was to widen the central bank mandate to encompass more responsibility for prudential and also crisis management functions. The wider mandate reflects the pivotal role played by central banks in handling the crisis.