The latest round of briefing papers for the Economic and Monetary Affairs committee’s monetary dialogue can be found here. Click on 14.07.2014. The papers discuss the strength of the euro and non-standard monetary policies. My paper is “The ECB and Non-Standard Policies: Too Little Too Late?” Click here for a version without the nasty “Draft” watermark. The paper contrasts the ECB’s approach to monetary policy in recent years with the that of the Federal Reserve. It also discusses the actions taken at the June Governing Council meeting and addresses issues relating to potential future asset purchase programmes. The abstract for the paper is as follows:
The ECB has been slower to cut interest rates and to consider asset purchase programmes than the other major central banks even though the euro area economy has performed worse than its comparators. This failure to act has not stemmed directly from the ECB’s price stability mandate. Indeed, by not acting sufficiently strongly, the ECB is now failing to meet its own definition of price stability. The measures introduced at the ECB’s June Governing Council meeting will have only a modest positive effect on the euro area economy. Large asset purchase programmes – of both sovereign bonds and private asset-backed securities – are overdue.
Monday’s set of announcements about the Central Bank of Ireland’s balance sheet assessments were a bad start to the ECB’s comprehensive assessment process. Details here.
Ireland’s announcement (a better term than “decision”, I think) that it is exiting the bailout without any precautionary credit line has been greeted as positive news by most commentators. Some sceptical comments here.
I’m giving a presentation tomorrow afternoon at the annual Dublin Economics Workshop conference in Limerick. (For those of you who don’t know these things, the Dublin Economics Workshop’s annual conference has always been held outside of Dublin ….)
The presentation is titled “Resolving Europe’s Banking Crisis” and provides facts and figures on Europe’s credit crunch, explanations for the sources of this problem and scenarios for the upcoming European banking stress tests.
I went to the ECON committee meeting with Mario Draghi in Brussels on Monday and came away fairly disappointed. My thoughts here.
Back to blogging again after a rare bit of time off over the summer, here are some comments on the current disagreement between Eamon Gilmore and the Troika about the upcoming Irish budget.
Some thoughts on where things stand in Cyprus including the parallels between Ireland’s treatment of Anglo’s debts and the current problems with Laiki\Bank of Cyprus.
Olli Rehn thinks the IMF were being mean to the euro area’s leaders in last week’s report on the Greek programme. I don’t think so. Here‘s a post that lists many of the punches the IMF pulled.
The IMF’s apologia, er, review on its Greek programme makes for very interesting reading. Some quick comments here.
In the presentation I gave last month on potential euro breakup scenarios, I flagged the introduction of capital controls in a euro-area member as an important step along the road to a potential breakup. Well, they are here in full today in Cyprus. Thoughts here.