Europe after the Crisis: Less or More Role for Nation States in Money and Finance ?
Andre Sapir ()
ULB Institutional Repository from ULB -- Universite Libre de Bruxelles
With the completion of the single European market and the full liberalization of capital markets two separate trilemmas emerged in the early 1990s: a monetary trilemma between free capital movements, fixed exchange rates, and national monetary autonomy; and a financial trilemma between free capital movements, financial stability, and national financial supervision autonomy. The paper argues that although these two trilemmas stem from the same root cause, financial integration, the financial trilemma is particularly acute for countries that have chosen to resolve the monetary trilemma by entering into a monetary union. The lesson from the recent crisis is that eurozone countries need to replace their national financial supervision institutions by supranational institutions capable of managing and resolving financial crises. This will require pooling together some of their fiscal sovereignty. © The Author 2012. Published by Oxford University Press.
Keywords: Economic and monetary union (EMU); Euro; European integration; Financial markets (search for similar items in EconPapers)
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Published in: Oxford review of economic policy (2011) nÂ° 27,p.608-619
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Journal Article: Europe after the crisis: less or more role for nation states in money and finance? (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ulb:ulbeco:2013/174291
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