Disegno delle istituzioni e stabilità finanziaria nell'Unione Monetaria Europea

Marco Lossani, Piergiovanna Natale () and Patrizio Tirelli

Economia politica, 1999, issue 2, 243-270

Abstract: In this paper, the consequences on financial stability of the institutional design envisaged in the Maastricht Treaty - which implicitly assigns the objective of financial stability to the National Central Banks (NCBs) - are assessed. The Maastricht Treaty spells out precisely the role of the European Central Bank (ECB) and NCBs within the European System of Central Banks (ESCB) as to achieve the objective of price stability, but it is not equally clear as far as the objective of financial stability is concerned. In an area like EMU with a high degree of financial and economic integration, the actions undertaken by NCBs in the fields of regulation, prudential supervision and Lending of Last Resort are characterized by relevant externalities across jurisdictions. The present institutional design does not allow EMU to benefit from the internalization of these spillovers since NCBs do not face incentives to undertake properly banking policy activities. Applying the principle of subsidiarity to the problem of power sharing between ECB and NCBs, the following suggestions for a revision of the institutional design are obtained: i) ECB should be assigned the task of coordinating regulation activities to avoid regulatory arbitrage, while prudential supervision should be managed jointly in a two-tier system by ECB and NCBs; the decision process pertaining the use of discount window and the Lending of Last Resort function should be centralized; ii) the rules pertaining the working of TARGET and EMS 2 should be changed in order to limit the risk of a financial crises imported from preins countries.

Date: 1999
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.rivisteweb.it/download/article/10.1428/1893 (application/pdf)
https://www.rivisteweb.it/doi/10.1428/1893 (text/html)
Access to full text is restricted to subscribers

Related works:
Working Paper: Disegno delle istituzioni e stabilità finanziaria nell'Unione Monetaria Europea (1999)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mul:jb33yl:doi:10.1428/1893:y:1999:i:2:p:243-270

Access Statistics for this article

Economia politica is currently edited by Alberto Quadrio Curzio, Giorgio Lunghini, Pier Carlo Nicola

More articles in Economia politica from Società editrice il Mulino
Bibliographic data for series maintained by ().