Two years since the financial crisis, Bruegel Director Jean Pisani-Ferry analyses the cost of the crisis and looks at how economic reform will come at a cost and how best to prepare for this. Deux ans ont passé depuis le déchaînement de la crise financière, et nous avons à peine commencé d’en mesurer les conséquences. Andrew Haldane, de la Banque d’Angleterre, a récemment estimé que la valeur actualisée de toutes les pertes de production présentes et futures approcherait sans doute une année de PIB mondial : 60.000 milliards de dollars, autant que cinq siècles d’aide publique au développement ou dix milliards de fois le coût de construction d’une salle de classe dans un village africain.La question centrale de la réforme… Read more
Bruegel blog
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How to insure the crisis
6th September 2010
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There are comfortable-and uncomfortable-trade offs
22nd August 2010
In this blog article, Bruegel Director Jean Pisani-Ferry analyses the two reports that have been released by the Basel Committee on Banking Supervision and the Financial Stability Board on the long-term implications of tighter capital regulation higher capital-to-assets ratios and the introducing of new liquidity requirements and on the short-term effects of their introduction. The debate over bank-capital regulation has all the ingredients of what economists love and other people hate. The Basel Committee on Banking Supervision and the Financial Stability Board have just released two reports on the long-term implications of tighter capital regulation – higher capital-to-assets ratios and the introducing of new liquidity requirements – and on the short-term effects of their introduction. In a nutshell, the… Read more
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The test was well worth the stress
2nd August 2010
In this article, Bruegel director Jean Pisani-Ferry takes stock of the results from the bank stress tests were made public in July. While having reservations about the technique to assess the banks, he explains why the tests are crucial in preventing Europe from going the Japanese way. Les dernières années nous ont rappelé quel est le coût économique d’une crise spasmodique du système bancaire, et combien grande est, en ce cas, l’urgence d’une intervention massive et résolue. Depuis plus d’un an, notamment depuis la publication par le FMI d’évaluations alarmantes, la question se posait de savoir si, comme le Japon il y a dix ans, l’Europe était exposée au risque presque aussi sérieux d’une crise latente, génératrice d’asphyxie économique. C’est… Read more
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France employment policy puts pressure on the budget
1st August 2010
France is one of the countries that invests the most on employment policy. But with the public deficits crisis, there is a risk to indiscriminately cut on spending. In this article, Bruegel Director Jean Pisani-Ferry argues that a better solution would be to devote funds to where they are needed the most and to undertake structural reforms at the same time. En matière d’emploi, la performance française est notoirement médiocre. La France est cependant l’un des pays qui dépensent le plus pour l’emploi : de l’ordre de 80 milliards, si l’on prend en compte à la fois le service offert par Pôle emploi, l’indemnisation du chômage, le soutien à l’activité partielle, la formation des demandeurs d’emploi, ce qui reste des… Read more
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Are we in 1936 or 1812?
19th July 2010
Bruegel Director Jean Pisani-Ferry analysis the current economic climate through a historical lens. He draws parallels to the year 1937 when the tough fiscal policy of the US federal government sharply cut GDP growth and resulted in a dramatic increase in unemployment. The current debt crisis also has echoes from past from the chain of sovereign defaults between the Napoleonic wars in the eighteenth and nineteenth centuries. The author explains why the the planned fiscal tightening in 2011 is financially inevitable, but economically risky. Dans la controverse entre partisans de la relance et avocats de la rigueur qui a fait rage ce printemps, il a souvent été fait référence à 1937. C’est en effet cette année-là, quatre ans après le début du… Read more
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Did you say federalism?
7th July 2010
In this column, Bruegel Director Jean Pisani-Ferry asks whether a budgetary union can survive without budgetary federalism? Europe needs some form of solidarity in the face of adversity, a form of "federal insurance" but without the cumbersome nature of a federal budget or a permanent increase in transfers. Against this context, he examines the options available to the European Union. It is an old debate, but tensions within the euro area have revived it: can a monetary union survive without some form of fiscal federalism?Until recently it was merely a topic for academic research. It is now of persistent concern for investors worldwide. Holders of European government bonds believed they knew what they had bought. Sure, there was no such… Read more
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Back to the G7?
29th June 2010
The Toronto declaration sounds strangely familiar, as was the case for the disputes leading up to the summit. On the macro side, the only issue for discussion seems to have been the rift between the US and Germany as regards the timing and pace of budgetary consolidation. And on the financial regulation side the agenda is mainly one for implementation by the advanced economies. The emerging countries – the very countries that make the G20 a different body – feature prominently in the section on the International Financial Institution and Development only. So the whole in the end reads as a traditional G7 communiqué as if what really matters for the world economy were decisions taken in Washington and Berlin… Read more
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Back to the G7?
29th June 2010
(Contribution to The Economist’s By Invitation Blog)The Toronto declaration sounds strangely familiar, as was the case for the disputes leading up to the summit. On the macro side, the only issue for discussion seems to have been the rift between the US and Germany as regards the timing and pace of budgetary consolidation. And on the financial regulation side the agenda is mainly one for implementation by the advanced economies. The emerging countries – the very countries that make the G20 a different body – feature prominently in the section on the International Financial Institution and Development only. So the whole in the end reads as a traditional G7 communiqué as if what really matters for the world economy were… Read more
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Towards a system to secure the euro
25th June 2010
Eurozone governance appears to be focused on three aspects: strengthening of budgetary discipline; surveillance of the eurozone countries competitiveness; and provisions for crisis management. While this is a sensible agenda, Bruegel Director Jean Pisani-Ferrydelves into the details of these three topics to explain how they can work in practice. He also examines the inadequacies of the current institutional framework of the euro area and asks if it is time to seriously consider the creation of an independent surveillance authority. Eurozone governance was for long a name without a game. The crisis, however, has brought clarity and, by common consent, discussions are focusing on three topics: strengthening of budgetary discipline; surveillance of the eurozone countries’ competitiveness; and provisions for crisis management.… Read more
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Watershed in Busan
18th June 2010
In this article, Bruegel director Jean Pisani-Ferry looks at the shift in gear during the G20 talks in Busan from budgetary stimulus to retrenchment. He analyses what this change will mean for Europe, with many countries in the continent dealing with a dismal budgetary situation that will call for adjustments not undertaken since the second world war. The consequences will also be seen across the Atlantic- with the US having to confront retrenchment at some pint. What does all this mean for the divergences that will emerge between the North and South G20 partners? The author looks at four possible consequences. The meeting of the G20 finance ministers on 5 June in Busan, Korea, will go down in history as… Read more