Publications

Since events related to financial, banking, and debt crises regularly make it into the news, a term that seemingly originated from the Bank for International Settlements (BIS) in the late 1970s has become more popular: macroprudential supervision. Whereas microprudential supervision relates to the oversight of individual market participants (e.g. banks), macroprudential policy relates to the supervision of an entire system (e.g. the financial system).

Globalization is often associated with delocalization and unfair competition with emergent countries that are flooding us with cheap goods and services regardless of good environmental practices or social benefits these populations should enjoy, like in rich countries. Beyond this spurious assessment hinge the even more fallacious concept of reciprocity that justifies a new form of protectionism and trade tariffs. The last blow to international trade stems from Brussels and its decision to tax imports of Chinese solar panels – from 37% to 68% – even though this could beget a trade war.

The May Newsletter explains the austerity concerns heralded during April, the European Banking Union issue, the coming implementation of the Tobin Tax and the fact that there was no major banking fatalities during the month.

In a recent post, Nicolas Lecaussin is pointing out that tax consequences can be studied as in a lab: some American States can be observed. Taxes were lowered in thirty States. If they gather only 20% of the US population, they have created 65% of US jobs.

“A recession can be a good time to grow a business”. Thus is the opinion of Lord Young, a British cabinet minister under late Prime Minister Margaret Thatcher and still having his own office in Downing Street. Lord Young’s comments are stated in a report to be published this week and addressed to Prime Minister David Cameron. It is obvious that Lord Young stands for a “creative destruction” and is actually stating an economic truth. But truth is not always welcomed by unions and especially by the Trades Union Congress.

The Friedman Foundation has published a report about the 22 American States that enforce school choice thanks to vouchers. Children’s work is better, teaching’s quality has improved and the overall cost of the school system is cheaper which is a benefit to low-income families.

The European Commission’s forecasts are gloomy: a 0.1% decrease of European GDP in 2013 as a 0.4% decrease for the Eurozone. It seems that, one after the other, all the member states are collapsing and get trapped into economical disarray. The European Commission gives more time for France and Netherlands to reduce their deficits, but Slovenia is on the edge of explosion while Cyprus, Spain and Italy are very far from recovering. Europe has become the “Sick Man of the World”.

Germany and Finance Minister Wolfgand Schäuble do not press for setting up a banking union and rejects a centralized authority whereas France and Finance Minister Pierre Moscovici are urging to set up the banking union through centralization. The latter position is also the Commission’s. The Eurozone financial convergence will prove to be complex: European negotiations are at a crossroad not knowing which paths to take yet.

WP 2013-03. Executive Summary International restructurings by globally acting enterprises have become a common occurrence in the wake of accelerating globalization and have led to increasing global relocations of economic…

These figures, calculated by the IREF, point out what is happening in the United Kingdom governed by Premier David Cameron. Since the Tories arrived in power in 2010, between 500.000…