1,721,055 research outputs found
The institutional and cultural foundations of the Federal Reserve's and ECB's non-standard policies
No full textFor institutions that are so inclined to «boring» policy-making as the Governor of the Bank of England once put it, central banks' recent adoptions of non-standard policies has been remarkable. With benchmark rates at or close to zero, a number of central banks in the advanced economies launched innovative programs and facilities and used their balance sheet to mitigate financial instability and support economic recovery. In spite of their common policy goals, central banks' unconventional monetary policies (UMPs) vary considerably in scope and design across advanced economies. The variation in UMP is perhaps most vividly illustrated by the UMPs of the two most prominent central banks: the European Central Bank (ECB) and the US Federal Reserve (FED). Why did the ECB and the FED design different UMPs? Specifically, why did the FED rely extensively on balance sheet policies such as asset purchase interventions rather than on non-standard liquidity facilities like the ECB? Why did the two central banks adopt different types of forward guidance? Using the comparative insights from the case studies, we argue that variation of UMPs cannot be satisfactorily explained by economic and financial fundamentals alone. Explanations that emphasize the influence of cultural identities as enshrined in the legal mandates of the two central banks are also insufficient to account for policy variation. We therefore suggest additional factors that enhance the explanation for why the ECB and the FED formulated different UMPs during the crisis. Specifically, we argue that the decision-making systems of the central bank's monetary policy setting body and the accountability relationship that tie the central bank to policy-makers also matter in the design of UMPs
The symbolic politics of delegation: macroprudential policy and independent regulatory authorities
Full text linkThis paper investigates the motivations that led policy-makers to delegate macroprudential authorities to newly created independent systemic regulatory authorities (SRAs). Three case studies are examined: the US Financial Stability Oversight Council, the European Systemic Risk Board and the UK’s Financial Policy Committee. Policy-makers’ motivations are captured by examining the specific institutional features of the newly created SRAs and by tracing the legislative debates that surrounded their creation. The findings of this empirical analysis call into question several of the conventional claims that are used to justify delegation to technocratic agencies from the functionalist and ideational scholarship. Given the limitations of the explanations based on efficiency considerations and socialisation of welfare losses, this paper suggests that the delegation of powers to SRAs was ultimately motivated by what is referred to as the ‘logic of symbolic politics.’ It is argued that the main motivation that emerges from the legislative debates for delegating this important task is that the SRAs provided a quick institutional ‘fix’ to signal to the public that in the wake of the international crisis of 2007– 2009, policy-makers were redressing regulatory mistakes made prior to and during the crisis that had caused a severe deterioration of public’s wealth
The government bond buying programmes of the European Central Bank: an analysis of their policy settings
No full textThis article investigates why the European Central Bank's (ECB's) unconventional monetary policies were relatively modest during the crisis, focusing specifically on the design of its government bond purchase programmes. Building from available explanations of the ECB's behaviour in the political science and public policy literature, we extrapolate a number of testable propositions with a view to helping to account for the specific features of the policies under investigation. These propositions build from scholarly works that emphasize three distinct fundamentals of the ECB's behaviour: legal; doctrinal; and institutional. We then provide evidence supporting our propositions by evaluating the ECB's policy settings during the crisis. In addition, we identify other factors that have shaped the design of the ECB's bond buying policies, namely the ECB's conception of its own independence
Domestic preferences and European banking supervision: Germany, Italy and the Single Supervisory Mechanism
No full textWhat explains regulators’ preferences concerning the Single Supervisory Mechanism (SSM)? The paper answers this question by providing an alternative account of the creation of the SSM using an institutionalist perspective. It is argued that the creation of the SSM does not simply reflect the material interests of governments and domestic financial firms, but that regulators’ positions were also significantly affected by the institutional environment in which they operated. Two characteristics of domestic supervisory governance are identified: the institutional responsibilities of banking regulators (microprudential and/or macroprudential) and the fragmentation of supervisory and monetary policies. The empirical analysis demonstrates the relevance of these factors for shaping regulators’ preferences both within and across countries
Assessing the appropriate size of relief in sovereign debt restructuring
Full text linkEste trabajo presenta un enfoque basado en principios para computar la quita de deuda apropriada en procesos de reestructuración de deuda soberana. Se muestra cómo calcular el monto de reducción de deuda que restaura la condición de sosteniblidad con alta probabilidad bajo la premisa de satisfacer un conjunto de restricciones impuestas por los principios que se siguen en el proceso de reestructuración. El tamaño de la quita se considera apropiado si conduce a la existencia de trayectorias de superávits fiscales primarios como ratio del PIB que son puntos fijos económica y políticamente factibles, y que satisfacen la restricción intertemporal de prespuesto del gobierno en un porcentaje “alto” de los posibles estados de la naturaleza. La factibilidad económica se define a partir de restricciones económicas, y la factibilidad política se define en función de las restricciones que imponen los principios de la reestructuración. También se muestra que desde 1970 los procesos de reestructuración soberana han sido seguidos poco tiempo después por una nueva reestructuración o default en un porcentaje alto de casos, lo que sugiere que el alivio de deuda se ha dado en la forma de “demasiado poco”.Sin perder el foco sobre la seguridad social en salud, y con el objeto de ampliar su comprensión, el análisis se ocupará, cuando resulte necesario, de poner en contexto los argumentos incorporando apreciaciones acerca del sistema de salud tomado como un todo. El análisis que se presenta permitirá conocer en detalle las modificaciones en el funcionamiento de los diferentes fragmentos de la seguridad social en salud y comprobar la persistencia de importantes problemas de eficiencia y equidad. En consecuencia, se verá que calificar a este grupo de instituciones como un sistema parece inapropiado.Fil: Guzmán, Martín. Columbia University Business School. Division of EconomicsFil: Lombardi, Domenico. Oxford Institute for Economic Policy. Centre for International Governance Innovation’s Global Economy Progra
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