EconPapers    
Economics at your fingertips  
 

Risk Reduction and Risk Sharing in the Governance of the Euro Area

Fabrizio Balassone (), Cecchetti Sara, Martina Cecioni (), Cioffi Marika, Wanda Cornacchia, Flavia Corneli () and Semeraro Gabriele

Politica economica, 2016, issue 3, 463-488

Abstract: The unchecked build-up of imbalances during the 2000s exposed the euro area to the risk of sudden stops. Such risk materialized in 2009-10 and its consequences were amplified by the absence of adequate institutions. Europe embarked on a thorough process of reforming its economic governance. We review the measures taken concerning sovereigns and banks since 2010 and discuss possible ways forward on both fronts. We argue that, while significant progress has been achieved, a lot of ground remains to be covered. In general, reforms have favoured risk reduction over risk sharing. As a result, in the face of exceptional circumstances, the euro area is not equipped with the fiscal tools necessary for macroeconomic stabilization; moreover, banking union lacks common financial backstops. Only further risk (and sovereignty) sharing can avoid harmful pro-cyclical excesses.

Keywords: Economic and Monetary Union; Banking Union; Fiscal Union; Sovereign Risk; Prudential Regulation; Sovereigns-Banks Nexus. (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
https://www.rivisteweb.it/download/article/10.1429/85007 (application/pdf)
https://www.rivisteweb.it/doi/10.1429/85007 (text/html)
Access to full text is restricted to subscribers

Related works:
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:je8794:doi:10.1429/85007:y:2016:i:3:p:463-488

Access Statistics for this article

Politica economica is currently edited by Giuseppe Marotta

More articles in Politica economica from Società editrice il Mulino
Series data maintained by ().

 
Page updated 2017-10-09
Handle: RePEc:mul:je8794:doi:10.1429/85007:y:2016:i:3:p:463-488