As the process of digitalisation makes ideas around decentralised finance more relevant, there will be an increasing need for monitoring and supervision.
The European Central Bank needs a new tool to prevent the current rise in spreads, triggered by monetary policy tightening, from escalating into a new euro-area crisis.
The real issue for EU leaders when they discuss Ukraine’s application at a 23-24 June summit and beyond, is what kind of club the EU should be.
The ECB should design a specific tool that will accompany interest rate hikes to neutralise the risk of fragmentation directly for countries facing it, staying within the bounds of the EU treaties and ensuring political legitimacy. We also advocate structural changes to the ECB’s collateral framework to avoid unnecessary uncertainty surrounding the safe asset status of European sovereign bonds.
Even though inflation in the euro area is lower than in the US, three issues make it a lot more difficult for the ECB to control inflation and preserve financial stability. Once again, the limits of EMU architecture are visible and will require a rethink.
A relatively new fintech market, BNPL is currently not regulated in the EU, meaning that consumers do not have the same protection level as they do for other credit products.
The war in Ukraine has brought an end to a 60-year period in which Europe has enjoyed a peace dividend, an amount released by reducing defence expenditure to be invested in beneficial economic activities.