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This paper highlights how changes in the composition of demand affect income dispersionin the short run. We first document how the share of aggregate spending dedicated tolabour-intensive goods and services shrinks (expands) during downturns (booms), andargue that this contributes to the observed pro-cyclicality of employment and output inlabour-intensive industries. Using a two-sector general equilibrium model, we then assesshow this demand composition channel influences the cyclical properties of the incomedistribution. Consistent with empirical evidence, we find income inequality to be coun

Der Austritt des Vereinigten Königreichs aus der Europäischen Union hat weitreichende Implikationen für die britische Finanzbranche. London ist die bisherige Finanzhauptstadt Europas. Dort ansässige Finanzinstitutionen können spezielle EU-Rechte nutzen, um Dienstleistungen im gesamten Binnenmarkt anzubieten. Das Vereinigte Königreich erfüllt somit gegenwärtig zwei Funktionen im europäischen Finanzsystem: Erstens ist es ein Knotenpunkt für Firmenkundengeschäfte großer europäischer Banken und zweitens fungiert das Land als Eintrittstor für Kapital aus Nicht-EU-Staaten in den Binnenmarkt. Verliert das Vereinigte Königreich im Zuge des EU-Austritts den Zugang zum europäischen Binnenmarkt, dürften beide Funktionen in weiten Teilen obsolet werden. Die vorliegende Analyse zeigt einige der möglicherweise weitreichenden Folgen auf. Unklar ist, inwieweit die britische Regierung Verwerfungen im Finanzsektor auffangen könnte. Eine Möglichkeit wäre, dass das Vereinigte Königreich seine Beziehungen zu Kronbesitztümern und Überseegebieten, die in vielen Fällen als Steuer-Oasen gelten, intensiviert. Im Kontext der Bemühungen der EU zur Eindämmung unkooperativer Steuerplanungspraktiken könnte dies als Bedrohung wahrgenommen werden und die Verhandlungen weiter verkomplizieren. ; The United Kingdom's exit from the European Union will have far-reaching implications for the British financial sector. London is currently the financial capital of Europe, and the UK's financial institutions benefit from passport rights that allow them to provide their services throughout the Single Market. The UK plays two key roles in the European financial system: the first as a major hub for wholesale banking activities conducted by large European banks, and the second as a major entry point for non-European capital entering the Single Market. If the UK were to lose its financial passport rights, both of these roles would be significantly diminished. This Economic Bulletin analyzes some of the potential consequences of the UK losing its financial passport. One possibility is that the UK will push for greater integration with offshore financial centers in its Crown dependencies and overseas territories in order to compensate for the costs of Brexit. Such a move would run counter to the EU's objectives to prevent "aggressive tax planning," and may further ccomplicate negotiations between the EU and the UK.

Nach der Finanzkrise von 2008/2009 erließ der Basler Ausschuss für Bankenaufsicht einen neuen Vorschriftenkatalog zur Bankenregulierung (Basel III). Erstmals seit der Einführung internationaler Standards zur Bankenregulierung im Jahr 1988 werden darin verbindliche Vorgaben zur Liquiditätsregulierung formuliert. Eckpfeiler dieser Regelungen sind zwei Bilanzkennzahlen, mit denen die Liquiditäts- und Fristentransformation der Banken verringert werden soll. Auch wenn eine Regulierung des Liquiditätsrisikos im Bankensektor zu begrüßen ist, so bergen die neuen Vorschriften doch diverse Fallstricke. Erstens beruhen die beiden Kennzahlen auf unterschiedlichen Definitionen von Liquidität und Finanzierungsstabilität; dadurch wird das Regelwerk unnötig kompliziert und intransparent. Zweitens ist fraglich, ob sich Liquiditätsprobleme im Bankensektor mit einem auf Kennzahlen basierenden Ansatz am effektivsten und effizientesten lösen lassen. Drittens können die neuen Liquiditätsvorschriften die Umsetzung der Geldpolitik der Zentralbanken beeinträchtigen und gegebenenfalls einer reibungslosen Steuerung der Leitzinsen im Wege stehen. ; Following the financial crisis of 2008/09, the Basel Committee on Banking Supervision introduced a new framework for banking regulation, commonly known as Basel III. For the first time since the inception of global bank regulation in 1988, Basel III contains explicit mandatory rules for liquidity regulation. The cornerstones of the new liquidity regulation are two balance sheet ratios that seek to reduce banks' liquidity transformation. While regulation addressing liquidity risks in the banking sector is clearly desirable, the new rules have several pitfalls. First, two ratios rely on different definitions of liquidity and funding stability which makes the regulatory framework unnecessarily complicated and opaque. Second, it is unclear whether a ratio-based approach is the most effective and efficient way to rectify liquidity problems in the banking sector. Third, it is unclear how the new liquidity rules interact with the existing monetary implementation frameworks of central banks and whether they hamper a smooth steering of policy interest rates. The present report provides an overview of the new liquidity rules and its rationale, and discusses the pitfalls of this new regulation.

The United Kingdom's exit from the European Union will have far- reaching implications for the British financial sector. London is currently the financial capital of Europe, and the UK's financial institutions benefit from passport rights that allow them to provide their services throughout the Single Market. The UK plays two key roles in the European financial system: the first as a major hub for wholesale banking activities conducted by large European banks, and the second as a major entry point for non- European capital entering the Single Market. If the UK were to lose its financial passport rights, both of these roles would be significantly diminished. This article analyzes some of the potential consequences of the UK losing its financial passport. One possibility is that the UK will push for greater integration with offshore financial centers in its Crown dependencies and overseas territories in order to compensate for the costs of Brexit. Such a move would run counter to the EU's objectives to prevent "aggressive tax planning," and may further complicate negotiations between the EU and the UK.

The recent financial crisis has exposed the fragility of the banking sector to sudden withdrawals of wholesale funding, asset price declines and market dry-ups. Governments and central banks had to step in to prevent major banks from defaulting. These events led to renewed interest in the question whether the fragility of banks should be tolerated as a necessary, even desirable feature of an efficient process of financial intermediation, or whether banks should be subject to stricter regulation ex ante. This Round-Up summarizes the key arguments on both sides of the debate.

IP/A/ECON/2015-01 - This policy contribution was prepared for the European Parliament Committee on Economic and Monetary Affairs ahead of the European Parliament's Monetary Dialogue with the President of the European Central Bank on 15 June 2015 (http://www.europarl.europa.eu/committees/en/econ/monetary-dialogue.html).