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Begin New Search Topic Financial Crisis Political Geography Europe Content Type Special Report Publishing Institution Center for Social and Economic Research - CASE

1. Potential impact of financial innovation on financial services and monetary policy

Author:
Marek Dabrowski
Publication Date:
07-2017
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
The recent wave of financial innovation, particularly innovation related to the application of information and communication technologies, poses a serious challenge to the financial industry’s business model in both its banking and non-banking components. It has already revolutionised financial services and, most likely, will continue to do so in the future. If not responded to adequately and timely by regulators, it may create new risks to financial stability, as occurred before the global financial crisis of 2007-2009. However, financial innovation will not seriously affect the process of monetary policymaking and is unlikely to undermine the ability of central banks to perform their price stability mission.
Topic:
Energy Policy, Environment, Monetary Policy, Financial Crisis, Economic Growth, Innovation, and Trade
Political Geography:
Europe, Global Focus, and European Union

2. Revisiting the Latvian and Greek Financial Crises: The Benefits of Front-Loading Fiscal Adjustment

Author:
Anders Åslund
Publication Date:
05-2015
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
This paper discusses why Greece has done so poorly in comparison with all other European Union countries since the onslaught of the global financial crisis in 2008. To show what was wrong with its fiscal adjustment, this paper compares Greece with the other European Union country that was hit be the most severe fiscal crisis, namely Latvia. The conclusion is that front-loaded fiscal adjustment works much better. Greek economic policy has been a popular topic among opinion writers, notably Nobel Prize winner and New York Times columnist Paul Krugman, who claimed that Greece suffered from austerity. Because of his prominence in the international public debate, I shall scrutinize his arguments on the Greek crisis. The paper also examines what policy the International Monetary Fund has pursued with regard to Greece, and how its views have been influenced by the debate and Greek economic developments. Finally, the paper assesses what lessons can be drawn from the contrasting experiences of Latvia and Greece. The conclusion is that a fiscal adjustment should be sufficient to resolve the crisis to restore confidence and that it should be as front-loaded as is practically and politically possible.
Topic:
Financial Crisis, Finance, Economic Growth, Macroeconomics, Fiscal Policy, and Trade
Political Geography:
Europe, Eastern Europe, Greece, and Latvia

3. On Competition in the Banking Sector in Poland and Europe Before and During the Crisis

Author:
Małgorzata Pawłowska
Publication Date:
01-2015
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
In the past decades, the banking sector has come to be known in literature as the banking industry as it was geared to increasing profits, banks were growing, and banking products developed dynamically. It was believed that competition in the banking sector makes banks more efficient and stimulates financial innovation opening new markets. The financial crisis of 2007–2008 has sparked the interest of researchers and politicians in competition in the banking sector and its impact on the stability of the financial sector and overall economic growth. However, researchers cannot agree whether more competition improves or hinders stability. The paper is comprised of three sections and a summary. The first section discusses the concept of competition in the banking sector as well as measures of competition. The second section is a review of literature on competition in the banking sector and its determinants. The third section presents the results of research on competition in the EU, including my own research as well as other research. The paper concludes with a short summary. This publication was presented by Małgorzata Pawłowska during the 134th mBank-CASE Seminar "The global financial crisis: changes in competition in the banking sector in Europe, the role of regulation and intervention by governments and central banks".
Topic:
Financial Crisis, Finance, Economy, Global Financial Crisis, and Banks
Political Geography:
Europe, Poland, and European Union

4. Forecasting Financial Stress and the Economic Sensitivity in CEE Countries

Author:
Grzegorz Poniatowski and Maciej Krzak
Publication Date:
07-2014
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
This paper presents forecasts for the Financial Stress Index (FSI) and the Economic Sensitivity Index (ESI) for the period 2015-2015 for six countries in the region, namely the Czech Republic, Estonia, Hungary, Latvia, Lithuania and Poland. It is a continuation of the endeavor to construct synthetic indices measuring financial stress and economic sensitivity for twelve Central and East European countries using the Principal Component Analysis. In order to obtain forecasts of the FSI, we estimated Vector Autoregression (VAR) models on monthly data for the period 2001-2012 separately for all the countries. Using quarterly historical values of ESI and FSI, we estimated Dynamic Panel Data Model for the complete sample of countries. Parameters of the model were later used for forecasting the ESI. Obtained results suggest that the FSI will start to rise in 2014 in the Czech Republic, Lithuania, and Estonia. For Latvia and Hungary, we observed a conversion in the trend, i.e. at the beginning of 2015, when the index should start to fall. According to our forecasts, the ESI will be rising in the next two years, except for Hungary, where we predict a continuous decrease in economic sensitivity.
Topic:
Economics, Financial Crisis, and Macroeconomics
Political Geography:
Europe, Central Asia, Caucasus, Eastern Europe, Poland, Lithuania, Estonia, Hungary, Latvia, and Czech Republic

5. Fiscal and Monetary Policy Determinants of the Eurozone Crisis and its Resolution

Author:
Marek Dabrowski
Publication Date:
08-2012
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
Unlike the crisis years of 2007-2009 (when the insolvency of large banks was a major problem), the current round of the global financial crisis has fiscal origins. Almost all developed countries suffer from an excessive public debt burden that has been built up over the last two decades or more. The financial crisis caused a further deterioration of government accounts as a result of ill-tailored countercyclical fiscal response and, in some cases, a costly financial sector rescue. All excessively indebted countries must conduct fiscal adjustment, even if this involves economic and political costs in terms of lower output and higher unemployment. Central banks can reduce these costs through accommodative monetary policies but without compromising their anti-inflationary missions and institutional independence. The ECB is additionally constrained by its institutional status which is based on a delicate cross-country political consensus. Excessive ECB involvement in quasi-fiscal rescue operations can undermine this consensus and lead to a disintegration of the Eurozone. There are also strong arguments in favor of strengthening fiscal and banking integration within the EU, especially the fiscal discipline mechanism at national levels, and building the EU rescue capacity in respect to sovereigns and banks based on strong policy conditionality.
Topic:
Financial Crisis, European Union, and Sovereign Debt
Political Geography:
Europe