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In RealTime posts, PIIE senior staff and colleagues discuss the fast-moving economic news, financial developments, and public policy choices confronting the United States and the world.
In a recent interview with PBS’s Frontline, Lanny Breuer—head of the criminal division at the Department of Justice—appeared to admit that some financial institutions were too big to prosecute. In the “too big to fail is too big to jail” controversy that ensued, lobbyists and other supporters of big Wall Street firms tried all kinds [...]
On February 14, European Commissioner Michel Barnier and Federal Reserve Governor Daniel Tarullo both indicated their agreement to quickly give the Basel III accord binding force over, respectively, European and American banks. This is welcome. But even more important than the speed of adoption is that implementation should stay true to what the accord stipulates. [...]
The political agreement reached early on December 13 by Europe’s finance ministers makes it highly likely that legislation establishing a Single Supervisory Mechanism (SSM) with the European Central Bank (ECB) at its center will be enacted in March 2013. This is a big European success, high up on what was the range of possible outcomes. [...]
Mary Schapiro, the chair of the US Securities and Exchange Commission (SEC), has announced that she will step down from her position next month after four years in office. President Barack Obama appointed one of the four other SEC Commissioners, Elisse Walter, to replace her until a more permanent successor is chosen next year. The [...]
The International Monetary Fund (IMF) has released a Pilot External Sector Report in which the organization for the first time has embraced the concept of fundamental equilibrium exchange rates (FEERs) for use in its surveillance activities. The report, issued on July 30, was an important though little-noticed step that could portend progress toward improving multilateral [...]
As indicated by Spanish and Italian secondary market 10-year bond yields of 6 to 7 percent, the euro area remains a work in progress. Italy, on the other hand, seems capable of issuing new bonds, at least to domestic buyers, at slightly lower rates, despite its recent Moody’s downgrade. Because the European Central Bank (ECB) [...]
The Barclays scandal over manipulation of the LIBOR (an acronym which stands for London InterBank Offered Rate) has put this important monetary indicator in the spotlight in recent days. The LIBOR rate may not be well known to people outside the financial sector, but it affects most people’s lives directly or indirectly, underpinning hundreds of [...]
The European Union Council has concluded its summit in Brussels by taking another incremental but significant step forward in what is still likely to be a long road toward completing the economic and monetary union. Several decisions stand out in the communiques.1 But what was striking was how their decisions on banking supervision followed the [...]
On the face of it, the financial crisis of 2007-08 has helped rebalance the governance of global financial authorities, partially correcting the prior underrepresentation of emerging economies and of Asia in particular. From November 2008 to April 2009, when the G-7/G-8 was superseded by the G-20, the Financial Stability Board (FSB) was empowered and enlarged [...]
The European Union’s finance ministers are furiously debating a piece of legislation known as CRD4/CRR (the acronyms stand for the fourth Capital Requirements Directive and the Capital Requirements Regulation). The measure is intended to implement the Basel III accord on bank capital, leverage, liquidity and risk management, which was adopted at the global level by [...]