Past Event

Sovereign exposure limits

On 19th June, we are hosting an invitation-only workshop on sovereign exposure limits.

Date: June 19, 2017, 10:00 am Topic: Banking and capital markets

The regulatory treatment of banks’ sovereign exposures in the euro area is a significant issue for the possible strengthening of Europe’s banking union project, as a so-called “risk-reduction” counterpart to possible risk-sharing measures such as the creation of a European Deposit Insurance Scheme (EDIS). But unlike for EDIS and other relevant matters, there has been only limited public discussion of how to address sovereign exposures, and discussions held in the ECOFIN format in 2016 have not led to a consensus position. Work on sovereign exposures is ongoing within the Basel Committee, but it is also clear that this challenge has unique features within the euro area.

This event will aim at brainstorming and clarifying issues of feasibility and impact, with a focus on a proposal for sovereign exposure limits that would be uniform across euro-area member states and would not involve capital charges on moderate exposures. We will discuss this both from a prudential perspective, and from the perspective of possible implications for sovereign debt market dynamics and fiscal policy.

This is an invitation-only event open only to Bruegel members and to a small number of invited experts. 

This event will be off  the record.

Location & Contact

Bruegel, Rue de la Charité 33, 1210 Brussels

Matilda Sevon

[email protected]

Read about event More on this topic
 

Past Event

Past Event

The role of the ECB in stabilizing sovereign debt markets

What are the main lessons of ECB interventions in specific sovereign debt markets?

Topic: Macroeconomic policy Date: April 1, 2021
Read about event More on this topic
 

Past Event

Past Event

The state of the policy debate on the EU crisis management and deposit insurance framework

This members-only event welcomes Jan Reinder De Carpentier, Vice-Chair of the Single Resolution Board for a conversation with an invited audience.

Speakers: Nicolas Véron and Jan Reinder De Carpentier Topic: Banking and capital markets Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: March 25, 2021
Read article More on this topic More by this author
 

Blog Post

Thinking big: debt management considerations for the EU’s pandemic borrowing plan

If not handled correctly, the European Union’s transition to take on a new role as an issuer of public debt risks crowding out existing markets. Managing that transition correctly is almost as big a challenge as spending the money itself.

By: Rebecca Christie Topic: Macroeconomic policy Date: December 9, 2020
Read article Download PDF
 

Policy Contribution

European Parliament

From climate change to cyber attacks: Incipient financial-stability risks for the euro area

The European Central Bank’s November 2019 Financial Stability Review highlighted the risks to growth in an environment of global uncertainty. On the whole, the ECB report is comprehensive and covers the main risks to euro-area financial stability, we highlight issues that deserve more attention.

By: Zsolt Darvas, Marta Domínguez-Jiménez and Guntram B. Wolff Topic: Banking and capital markets, European Parliament, Macroeconomic policy, Testimonies Date: February 6, 2020
Read article
 

Blog Post

Incorporating political risks into debt sustainability analysis

DSA applies to crisis countries only, but an early warning system identifying vulnerabilities is relevant for all countries. A more general, less stringent, debt vulnerabilities analysis (DVA) could be used to assess countries’ debt management policies and identify vulnerabilities, without leading immediately to policy consequences. A more general framework could also incorporate political risks that are significant determinants of debt dynamics

By: Andrea Consiglio and Stavros Zenios Topic: Global economy and trade, Macroeconomic policy Date: January 22, 2020
Read article Download PDF More on this topic
 

External Publication

An Effective Regime for Non-viable Banks: US Experience and Considerations for EU Reform

The US regime for non-viable banks has maintained a high degree of stability and public confidence by protecting deposits, while working to minimise the public cost of that protection. EU reformers can draw valuable insights from the US experience. A review of the US regime supports arguments in favour of harmonisation and centralisation of bank insolvency proceedings and deposit insurance in Europe’s banking union.

By: Anna Gelpern, Nicolas Véron and Bruegel Topic: Banking and capital markets Date: July 22, 2019
Read article More on this topic
 

Blog Post

The inverted yield curve

Longer-term yields falling below shorter-term yields have historically preceded recessions. Last week, the US 10-year yield was 21 basis points below the 3-month yield, a feat last seen during the summer of 2007. Is the current yield curve a trustworthy barometer for future growth?

By: Inês Goncalves Raposo and Bruegel Topic: Global economy and trade Date: June 11, 2019
Read article More on this topic
 

Blog Post

Whose (fiscal) debt is it anyway?

The authors map how much fiscal debt is in the hands of domestic and foreign holders in the euro area. While the market for debt was much more international prior to the crisis, this trend has since been reversed. At the same time, central banks have become important holders of fiscal debt.

By: Maria Demertzis, David Pichler and Bruegel Topic: Macroeconomic policy Date: February 6, 2019
Read article More on this topic
 

Blog Post

The consequences of Italy’s increasing dependence on domestic debt-holders

Bruegel’s updated data set of sovereign bond holdings illustrates how a rising share of Italian debt is held by domestic investors – a development with particularly significant implications, in the context of the Italian government’s disagreement with the European Commission over spending plans outlined in its draft budget.

By: Jan Mazza and Bruegel Topic: Macroeconomic policy Date: November 6, 2018
Read article More on this topic
 

Blog Post

The higher yield on Italian government securities could soon be a burden for the real economy

The increase in the spread between Italian (BTP) and German (Bund) government securities is directly an additional burden for Italy public finance, and thus for tax payers. But it could soon also become a burden for the real economy, as the increased yield on Italian government securities could pull up the cost of bank loans for Italian firms, thus imparting a deflationary impact onto the economy.

By: Francesco Papadia, Inês Goncalves Raposo and Bruegel Topic: Macroeconomic policy Date: September 10, 2018
Read article Download PDF More on this topic More by this author
 

Policy Contribution

High public debt in euro-area countries: comparing Belgium and Italy

This Policy Contribution looks at the evolution of public debt in Belgium and Italy since 1990 and uses the debt dynamics equation to explain the contrasting evolution in the two countries in the run-up to the introduction of the euro, during the early years of the euro and since the beginning of the crisis, arguing that the euro could have been used also by Italy to undertake sufficiently large fiscal adjustment.

By: André Sapir Topic: Macroeconomic policy Date: September 6, 2018
Read article More on this topic
 

Opinion

The ECB is compromising the attractiveness of euro-area sovereign bonds

The ECB should refine its collateral framework in order to continue protecting its balance sheet without putting at risk the safe-asset status of sovereign bonds of the euro area.

By: Grégory Claeys, Inês Goncalves Raposo and Bruegel Topic: Banking and capital markets Date: August 29, 2018
Load more posts