Reports of Professor Elisabeth Krecké
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Scenarios for Georgieva’s leadership of the IMF
The new head of the IMF, Kristalina Georgieva, has some novel plans for the future of her organization. She wants to redefine its core aims to address climate change, economic fairness and gender equality. If she achieves her mission, the IMF could transform from a tough, economic reform-minded lender of ...
Leadership Challenges 2020: European Central Bank torn between policy and politics
With the governing body of the European Central Bank bitterly divided over monetary policy at the times of political pressure and economic uncertainty, new President Christine Lagarde faces an extraordinary challenge of putting Europe’s most important financial and regulatory institution back on an even keel.
Question marks over the ECB’s governance
When Sabine Lautenschlaeger became the fourth representative of Germany on the ECB governing bodies to resign on former President Mario Draghi’s watch, the issues of his legacy and the collegiality in the EU’s central bank have come to the fore. Growing doubts over the bank’s stimulus policies combined with ignoring ...
The promises and risks of the EU’s single safe asset project
The launch of a Sovereign Bond-Backed Security (SBBS) is advocated by EU leaders as the best way to overcome the flaws inherent in the monetary union, which became notably obvious after the euro debt crisis of 2009. The SBBS is supposed to offer European investors new reliable stores of value, ...
Low interest rates: How long will savers be penalized?
Low, near-zero and negative interest rates around the world are depriving savers of potential earnings. Just a couple of years ago, it seemed as if a normalization of interest rates was on the horizon. Now, however, economic and political realities portend a “low-for-long” scenario. In fact, central bankers – in ...
The dangers of preferential treatment for sovereign debt
Under current rules, eurozone countries’ bonds are classified as “zero-risk,” meaning banks are not required to hold any capital against such assets. The system creates a perverse incentive for banks to stock up on sovereign debt, creating a toxic mix – but what can be done? Putting risk assessments on ...
The European Central Bank – independent and unaccountable?
Since its creation in 1998, the European Central Bank has earned a reputation as one of the world’s most independent monetary policy authorities. Unlike its peers, the ECB has no fiscal counterpart pressuring it to manipulate interest rates. Yet as the scope of its activities and global influence have expanded, ...
Breaking through zero: New options for monetary expansion in the EU
After dropping interest rates close to zero and pumping 2.6 trillion euros into Europe’s economy through debt purchases, is the European Central Bank out of ammunition? Not necessarily. Through its “targeted longer-term refinancing operations” (TILTROs), the ECB is planning to use negative interest rates to pay commercial banks to make ...
