By all accounts, EU member countries have for months been debating how to implement the minimum bank capital standards agreed under Basel III. Their arguments have unfolded as the EU works to complete its fourth Capital Requirements Directive (CRD4) and its Capital Requirements Regulation (CRR); (see Véron 2012). Three issues have been contentious: (i) whether […]
I have been a close friend of Michael Mussa for over twenty years. When Mike joined the International Monetary Fund (IMF) as Economic Counselor and Director of Research in 1991, I was his deputy. When I left the Fund in 1994, he and I stayed in frequent contact, including socially. And when Mike left the […]
The G-20 Finance Ministers and Central Bank Governors, who met in Seoul over the weekend of October 23–24, made only minor progress on currency and balanced growth issues—certainly not enough progress to decrease materially the threat of continued currency wars. Yes, they said all the right things about moving toward “more market determined exchange rate […]
On January 14 President Obama announced that he would ask Congress to impose a “financial crisis responsibility fee” on the 50 largest financial institutions. The fee (hereafter referred to as the tax) would be applicable to all financial institutions with more than $50 billion in consolidated assets. If it becomes law, approximately 35 US banks […]
The G-20 summit meeting in London, which ended on Thursday (April 2), produced a good result. It is premature to call it “a new Bretton Woods,” or a “new global order,” or even “a turning point”—but the leaders did much better than was expected only two months ago and they delivered on many of the […]
A number of economists and financial experts have begun suggesting that discussions of regulatory reform—at the G-20 summit meeting in mid-November and elsewhere—should be curtailed or postponed because the implied tightening of regulation could complicate the management and recovery from the financial and economic crisis. I think this view is overwrought. Let me elaborate. Characterizing […]
It’s official: the big boys (and big girls) are coming to town. The White House has announced that the heads of state of the G-20 countries will meet in Washington on November 15 for a financial summit. In some circles this is being billed as "Bretton Woods II"—a historic opportunity to rewrite the rules of the international financial architecture, spurred by the most serious global financial crisis since the Great Depression. Others see it less charitably, as look-busy grandstanding, with bad timing, inadequate preparation, and pie-in-the-sky ambitions.
The vote on Monday, September 29 in the House of Representatives to reject the
$700 billion Paulson troubled asset relief plan (TARP) was regrettable—not because the design of the TARP is flawless but rather because a failure of the US administration and the Congress to agree on an effective systemic approach to managing this increasingly worrisome financial crisis can only depress confidence further. The historic decline in US equity markets following that negative vote—the difficulties at Wachovia Bank notwithstanding—was hardly a coincidence.