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7251. Anatomy of a Train Wreck: Causes of the Mortgage Meltdown

Author:
Stan J. Liebowitz
Publication Date:
10-2008
Content Type:
Policy Brief
Institution:
Independent Institute
Abstract:
Why did the mortgage market melt down so badly? Why were there so many defaults when the economy was not particularly weak? Why were the securities based upon these mortgages not considered anywhere as risky as they actually turned out to be? This report concludes that, in an attempt to increase home ownership, particularly by minorities and the less affluent, virtually every branch of the government undertook an attack on underwriting standards starting in the early 1990s. Regulators, academic specialists, GSEs, and housing activists universally praised the decline in mortgage-under- writing standards as an “innovation” in mortgage lending. This weakening of underwriting standards succeeded in increasing home ownership and also the price of housing, helping to lead to a housing price bubble. The price bubble, along with relaxed lending standards, allowed speculators to purchase homes without putting their own money at risk. The recent rise in foreclosures is not related empirically to the distinction between subprime and prime loans since both sustained the same percent- age increase of foreclosures and at the same time. Nor is it consistent with the “nasty subprime lender” hypothesis currently considered to be the cause of the mortgage meltdown. Instead, the important factor is the distinction between adjustable-rate and fixed-rate mortgages. This evidence is consistent with speculators turning and running when housing prices stopped rising.
Topic:
Economics, Government, Markets, Financial Crisis, and Minorities
Political Geography:
United States

7252. Can Raúl Castro Revive Cuba's Private Sector?

Author:
Raj M. Desai
Publication Date:
03-2008
Content Type:
Policy Brief
Institution:
The Brookings Institution
Abstract:
With Raúl Castro's selection as president of Cuba, the post-Fidel era has begun. Raúl has affirmed that the country will remain on the Socialist path. But during his tenure he is likely to face growing pressures to reform to the Cuban economy.
Topic:
Markets
Political Geography:
Cuba, Latin America, and Caribbean

7253. The New EU Strategy towards Central Asia: A View from the Region

Author:
Nargis Kassenova
Publication Date:
01-2008
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
The German Presidency of the EU in the first half of 2007 inspired great hopes regarding the development of relations between the European Union and the states of Central Asia. In Brussels and other European capitals, it was expected that Germany, as an EU political and economic heavyweight and one of the key promoters of the Common Foreign and Security Policy, would be able to foster a coordinated Central Asian policy giving direction and coherence to European engagement in the region. It was widely hoped – within both the governments of Central Asia and the societies of the region – that Germany, which has traditionally been the most pro-active European country in the region, would elevate the relations between the EU and Central Asian states to a higher level.
Topic:
Foreign Policy, International Cooperation, and Bilateral Relations
Political Geography:
Europe, Central Asia, Asia, and Germany

7254. What do we know about the economics of adaptation?

Author:
Asbjørn Aaheim and Marianne Aasen
Publication Date:
02-2008
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
An attempt to summarise the state of knowledge about social and economic challenges related to climate change, for example based on the latest IPCC reports, would probably give the impression that impacts, adaptation and vulnerability are a question of interactions between people and institutions within small local communities (IPCC, 2007a), whereas mitigation can be addressed by political analyses and economics (IPCC, 2007b). In most economic studies, the motivation behind mitigation is presented as that of limiting greenhouse gas emissions to a given target
Topic:
Climate Change, Economics, and Energy Policy
Political Geography:
Europe

7255. Adaptation and Mainstreaming of EU Climate Change Policy: An Actor-Based Perspective

Author:
Darryn McEvoy, Kate Lonsdale, and Piotr Matczak
Publication Date:
02-2008
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Adaptation to climate change (in comparison to the mitigation agenda) is a relatively new focus for both research and policy communities. Drawing from ongoing 'actor-based' research being carried out for the ADAM project, this briefing paper reports on the knowledge base being developed through a process of engagement with experts and key stakeholders across a variety of countries, landscape types, sectors, institutions and actors. The concluding discussion then focuses on some of the implications of these early findings for both EU policy and decision-making more generally.
Topic:
Climate Change, Energy Policy, and Environment
Political Geography:
Europe

7256. The EU's Limited Response to Belarus' Pseudo 'New Foreign Policy'

Author:
George Dura
Publication Date:
02-2008
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Relations between the European Union and Belarus have seen little change since President Alexander Lukashenko came to power in 1994. Belarus has languished in a state of selfimposed political isolation despite the subsequent waves of enlargement – most notably, the 2004 enlargement which made Belarus a direct neighbour of the EU – and the formulation in 2004 of the European Union's Neighbourhood Policy (ENP). The EU's dual-track approach of imposing sanctions and trade restrictions whilst promoting democratisation in Belarus have so far yielded minimal results.
Topic:
Security and Foreign Policy
Political Geography:
Europe and Belarus

7257. What lessons can be learned from the EU emissions trading scheme?

Author:
Christian Egenhofer and Noriko Fujiwara
Publication Date:
02-2008
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
The EU emissions trading scheme (EU ETS) is designed to help EU member states achieve their commitments to limit or reduce greenhouse gas (GHG) emissions in a cost-effective way. It was not meant to work as a stand-alone tool but as part of the package of abatement measures across the board. It is a cap-and-trade system. Member states first impose caps on GHG emissions – initially only CO2 until 2012 – from installations in specified sectors, mainly the power sector and industry subsectors (e.g. steel, cement, glass, paper and pulp). Emissions from these sectors amount to 40% of total EU emissions. Next, they allocate allowances to installations. Each installation surrenders a number of allowances equal to the total emissions from that installation during the preceding year.
Topic:
Climate Change, Economics, and Environment
Political Geography:
Europe

7258. The Commission's New Border Package: Does it take us one step closer to a 'cyber-fortress Europe'?

Author:
Florian Geyer, Sergio Carrera, and Elspeth Guild
Publication Date:
03-2008
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
The European Commission presented a new 'Border Package' on 13 February 2008, setting out its vision of how to foster the further management of the EU's external border. Billed in a Commission press release as a “comprehensive vision for an integrated European border management system for the 21st century”, one of the key elements of this package is a Communication aimed at establishing an EU entry/exit system registering the movement of specific categories of third country nationals at the external borders of the EU. This Communication furthermore recommends the setting up of an Automated Border Control System enabling the automated verification of a traveller's identity (for both citizens and non-EU citizens alike), based on biometric technology as well as an Electronic Travel Authorisation System – abbreviated to ETA – which would oblige non- EU travellers to provide personal data for a pre-departure online check.
Topic:
Security and Science and Technology
Political Geography:
Europe

7259. Making sense of Sarkozy's Union for the Mediterranean

Author:
Michael Emerson
Publication Date:
03-2008
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
resident Sarkozy's proposed Union for the Mediterranean (or UMed) has so far been poorly conceived and, to say the least, awkwardly presented politically. However this does not mean that nothing good can come of it. The Barcelona process and its confusing combination with the European Neighbourhood Policy (ENP) have neither been a disaster nor a brilliant success. There is a case for streamlining a single European Mediterranean policy, rationalising and properly integrating Barcelona, the ENP and new ideas that the UMed initiative may produce. Both Italy and Spain as well as the South Mediterranean states themselves appear concerned not to undermine the existing structures (Barcelona and ENP). Steps could be made to lighten the overweight participation of the EU and all its 27 member states in too many meetings with too many participants and too few results, drawing on models that have emerged in the EU's Northern maritime regions. However, the EU as a whole will not agree to delegate the essential initiative on strategic matters to just its Southern coastal states – as has been made clear in recent exchanges between President Sarkozy and Chancellor Merkel. In addition the EU will also want to maintain a balance between its Northern and Southern priorities, and if the UMed becomes a new impetus for the South, an equivalent but different policy move can be contemplated for the EU's East European neighbours
Topic:
International Relations, Security, Foreign Policy, International Political Economy, and Regional Cooperation
Political Geography:
Europe, Spain, Italy, and Barcelona

7260. What Future for the Area of Freedom, Security and Justice? Recommendations on EU Migration and Borders Policies in a Globalising World

Author:
Didier Bigo, Sergio Carrera, and Elspeth Guild
Publication Date:
03-2008
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
The European Interest: Succeeding in the Age of Globalisation, COM(2007) 581 final, Brussels 3.10.2007, which states: “The EU is already working on many of the policy elements needed to equip it to take on the challenge of globalization with confidence…in the coming months, the Commission will be putting new ideas on the table to address these key challenges…Review of internal policies is already under way, aiming to reshape Europe to face gloablisation and give it the right platform to look beyond its borders.” Further the Communication identifies “Migration in a Globalized World” as one of the key political objectives and states: “In a Europe with no internal borders, the changing demands of an ageing society and a labour market in constant evolution have challenged established assumptions about immigration… a new global approach is needed so that migration strikes the right balance between the risk of labour market shortages, economic impacts, negative social consequences, integration policies and external policy objectives”. Information about the current financial Framework Programme on Solidarity and the Management of Migration Flows for the period 2007- 2013 and about the four Funds comprising it (European Refugee Fund, External Borders Fund, the European Return Fund and the European Integration Fund) can be found at See the original European Commission's proposal in the Communication on a framework programme on Solidarity and the Management of Migration Flows for the period.
Topic:
Human Rights, Migration, Immigration, and Law
Political Geography:
Europe and Brussels