The Euro Crisis in the Mirror of the EMS

Giancarlo Corsetti, Galina Hale, Eric Tallmann and Barry Eichengreen

No 13522, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Why was recovery from the euro area crisis delayed for a decade? The explanation lies in the absence of credible and timely policies to backstop financial intermediaries and sovereign debt markets. In this paper we add light and color to this analysis, contrasting recent experience with the 1992-3 crisis in the European Monetary System, when national central banks and treasuries more successfully provided this backstop. In the more recent episode, the incomplete development of the euro area constrained the ability of the ECB and other European institutions to do likewise.

Keywords: Financial crises; Sovereign and banking risk; Backstop; Currency devaluation (search for similar items in EconPapers)
JEL-codes: E63 F45 G01 N14 (search for similar items in EconPapers)
Date: 2019-02
New Economics Papers: this item is included in nep-cba, nep-his, nep-mac and nep-mon
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Citations: View citations in EconPapers (1)

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Working Paper: The Euro Crisis in the Mirror of the EMS (2019)
Working Paper: The Euro Crisis in the Mirror of the EMS (2019)
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