Institute for Research in Economic and Fiscal issues

IREF Europe - Institute for Research in Economic and Fiscal issues

Fiscal competition
and economic freedom


Financial and Banking Newsletter

Facebook's Libra; will it test the new ECB chief Christine Lagarde?

Facebook’s Libra; will it test the new ECB chief Christine Lagarde?

The Authoritarian Push for Tighter and More Centralised Banking Regulations

The Authoritarian Push for Tighter and More Centralised Banking Regulations


Will Monetary Union Become Fiscal Union? The Incoming New Personnel will Influence the Timing and Required Power Shifts.

Will Monetary Union Become Fiscal Union? The Incoming New Personnel will Influence the Timing and Required Power Shifts.

The ECB Is Getting Out Of Kilter With The Federal Reserve

The ECB Is Getting Out Of Kilter With The Federal Reserve


More Euro Deepening – The Currency

More Euro Deepening – The Currency

The Consequences of Future ECB Policies for Banking

The Consequences of Future ECB Policies for Banking


Latest publications

The EU To Push For EMU Deepening After May Elections

The EU To Push For EMU Deepening After May ElectionsWith little fanfare, the Eurogroup of 19 Eurozone finance ministries published in December its report detailing progress on how to strengthen and deepen the Economic and Monetary Union (EMU). Written in dry bureaucratic language, the Report Summary hardly appeared on the radar screens of (...)

The Effectiveness of MIFID II After 11 Months

The Effectiveness of MIFID II After 11 MonthsBackground to MIFID, MIFIR and EMIR
Version 2 of the Markets in Financial Instruments Directive (MIFID II) is a particularly important piece of recent European Law due to the extent and scale of its impacts on professionals operating in capital markets. MIFID II was enacted in 2014, and the (...)

The Stand-off Between Italy and the EU is a Serious Threat to the Euro

The Stand-off Between Italy and the EU is a Serious Threat to the EuroWhy all the fuss?
The nub of the dispute is Italy’s budget plans, which have been rejected by the European Commission (EC). The budget claims to increase public indebtedness by 2.4% in 2019 rather than the previously approved figure of 1.6%. However, the EC is unhappy about the violation of (...)

Central Banks in Europe Are About to Regulate Crypto-Assets.

Central Banks in Europe Are About to Regulate Crypto-Assets.In September, the UK cross party Parliamentary Committee dealing with bank regulation and central banking published its analysis of the opportunities and risks posed by ‘crypto-assets’, such as Bitcoin, Ether, as well as any other coin issued via an Initial Coin Offering.
The report makes stark (...)

Will The ECB Step In and Help Turkey Stabilise Its Currency?

Will The ECB Step In and Help Turkey Stabilise Its Currency?Why is Turkey’s Currency Falling?
During the past five years, we have observed the ebbs and flows of US and European capital markets investment appetite for the emerging markets (EM). Nothing deters EM investment more than currency fears, and many European fund managers must be pleased that (...)

The BIS Takes Aim At Cryptocurrencies:
Do They Understand The Economics Of Cool?

The BIS Takes Aim At Cryptocurrencies:To help understand the genuinely transformative business technology of blockchain in the context of cryptocurrency hype, Wharton professor David Werbach encourages the distinction to be drawn between three frequently confused concepts:
1. Cryptocurrencies such as Bitcoin, which are simply (...)

How Will Europe Deal With Italian Fiscal Defiance?

How Will Europe Deal With Italian Fiscal Defiance?Background to the looming standoff between Italy and the ECB
Italy’s new government continues to confirm its commitment to fiscal policies which have triggered sensationalist reports in mainstream media questioning whether Italy can remain a Eurozone country. The alliance between Italy’s 5 (...)

Euro Survival Depends Upon Federalization — Policy Options

Euro Survival Depends Upon Federalization — Policy OptionsDespite our regular reports highlighting some of the challenges facing those tasked with managing the euro, public concern about government debt levels appears to have subsided to its lowest level since 2008. This low level of public awareness is due to a combination of factors; the natural (...)

What Impact Will The Open Banking Rules Have On Fintech’s Aspirations to Disrupt Traditional Banking?

What Impact Will The Open Banking Rules Have On Fintech's Aspirations to Disrupt Traditional Banking?Introduction
Given the tremendous success of technology companies in the last 15 years, nobody is surprised by the continuing enthusiasm among investors, entrepreneurs, and policymakers for disruptive financial technology (“fintech”). However, banking regulators and rule-makers have always (...)

An Appraisal of Sovereign Bond-Backed Securities

An Appraisal of Sovereign Bond-Backed SecuritiesDespite the widely held view that the European sovereign debt crisis, and the euro itself, have been stabilized, we are not alone in the opinion that the deep problems not only remain but have probably been exacerbated by the ECB’s actions. Far from being addressed, these problems have only (...)

The Looming Crisis in the Private Provision of Public Services
Close Parallels with the Systemic Failure of Banks

The Looming Crisis in the Private Provision of Public ServicesThe collapse in January of Carillion PLC, the UK’s second largest construction and outsourcing company has attracted considerable media coverage. Carillion was principally engaged in public sector contracts to build (and in some cases operate) hospitals, prisons, roads, and part of the new (...)

Our Outlook for 2018
Interest Rates To Stay Low. The Consensus View is that Europe’s Banks are Recovering but we are Not So Sure.

Our Outlook for 2018The Interest Rate Outlook
Despite their shortcomings, European banks do not seem on the verge of collapse and few commentators, analysts or policymakers think that there will be any systemic wobbles in 2018. We do not necessarily disagree; with ECB interest rates still zero to negative and a (...)

Bitcoin: A fool’s Bubble or the Libertarian’s Anti-Establishment Currency Dream?

Bitcoin: A fool's Bubble or the Libertarian's Anti-Establishment Currency Dream?Brief technical overview Let us begin with a definition of the terms ‘digital currency’ and ‘cryptocurrency’.
Digital currency – any currency that exists on a ledger. This term includes all the world’s major currencies as well as cryptocurrencies. Notes and coins are the physical form of euros, (...)

The Search for a New Risk-Free Rate

The Search for a New Risk-Free Rate The ECB has lost confidence in bank industry efforts to reform or replace Euribor; but finding a replacement, and designing transitional arrangements will not be a straightforward task. It also risks highlighting the uncomfortable truth that the volume of unsecured interbank lending is (...)

Merkel wins her fourth term in Germany; will this help drive banking union or will nationalist political parties manage to oppose it?

Merkel wins her fourth term in Germany; will this help drive banking union or will nationalist political parties manage to oppose it?Although there never seemed much doubt that Mrs. Merkel would be elected for a fourth term as Chancellor of Germany on September 23rd, it is not clear whether she will be strong enough to help the EU authorities push through banking union before any pro-nationalist political parties gain real (...)

Ten Years from the onset of the Great Financial Crisis. What has been reformed?

Ten Years from the onset of the Great Financial Crisis. What has been reformed?Ten years on from the late summer collapse of first Paribas’ money market funds and then the failure of the UK’s Northern Rock bank, the media have published a raft of reviews reflecting on the past decade of banking reforms.
Central bankers were quick to use the anniversary to make grand (...)

European Safe Bonds – Can Europe’s problems be Saved by Clever Financial Engineering?

European Safe Bonds – Can Europe's problems be Saved by Clever Financial Engineering?Electoral victories for Mark Rutte of the Netherlands in March, followed by Emanuel Macron’s presidential ascent in France in May and his landslide Parliamentary victory in June, have encouraged the view that closer integration of Europe’s banking and financial system is quite likely. The (...)

By Bailing out unimportant banks Italy has undermined Banking Union

By Bailing out unimportant banks Italy has undermined Banking UnionThe contrast between the actions of the Spanish and Italian governments in the past two months could hardly be more marked. As we reported in June, the Madrid government allowed the relevant European authority – the Single Resolution Board – to apply the bail-in rules to failed Banco Popular. (...)

Large Spanish Bank Failures Raise Investor Fears over Bail-Ins; whilst Pressure Grows in Italy over Monte Dei Paschi

Large Spanish Bank Failures Raise Investor Fears over Bail-Ins; whilst Pressure Grows in Italy over Monte Dei PaschiBail-ins Expected after Banco Popular fails in Spain. Chewing gum accounting
Just as elections of political leaders have become difficult to predict, it is becoming harder to guess which of Europe’s beleaguered banks will be bailed out and rescued, or allowed to fail thus exposing creditors (...)

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