Suchergebnisse

AbstractIn this article, the role of credit rating agencies (CRAs) during the 2010–11 EU sovereign debt crisis is assessed. It is concluded that rating agencies lag behind markets, that their business model is flawed, and that the lack of competition renders the big three CRAs with too strong a market position. The reliance on CRAs should be reduced by attaching less importance to them in prudential regulation and accounting standards. At the same time, more competition and transparency is needed to increase the quality of ratings. Finally, several policy options to change the ratings industry are discussed, including the creation of a network of small CRAs, delegation of sovereign debt ratings to the European Central Bank or the creation of a European rating agency.

The integration of financial markets is a fast growing phenomenon worldwide, but especially in the EU. Along with the positive aspects such as simplifying financial transactions, there are also negative implications attached to it. As was the case with the current economic and financial crisis, a problem which arose locally managed to spread to a global level at an impressive speed. After examining the US and European financial supervision models, the authors conclude that a direct supervisor of cross-border acquisitions would be a good, although somewhat unrealistic, solution. This paper puts forward arguments in favour of separating all financial supervision of individual financial institutions from that of the stability of the financial system as a whole, which would be known as European Financial Services Authority (EFSA) in the case of the EU.

It is through a gradual evolution, rather than by grand design, that the somewhat fragmented economic policies of the EU now appear to be heading towards a rather more robust and coherent economic governance. EU Economic Governance and Globalization considers the following crucial question as the EU enters its final stage of institution-building; will the economic institutions of the EU push ahead to reform its rigid national economies and open them up to globalization and international competition?.

In a model with forward-looking behavior, we study disclosure policy when a central bank has private information on the future state of the economy. We find that the effects of advance disclosure depend on the presence of uncertainty about policy targets when the shock occurs. With uncertainty about policy targets, disclosure is harmless to current outcomes, owing to the strong dependence of inflation expectations on policy actions, which induces the central bank to focus exclusively on price stability. If the central bank's targets are common knowledge, disclosure of future shocks impairs stabilization of current inflation and output. [Copyright 2006 Elsevier B.V.]