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May 7, 2012 | The Failure of Today's Monetary System

The current global monetary system is insufficient to deal with today’s challenges. ++ Since the collapse of Bretton Woods, there has been a US dollar-led system, which in turns allows for less than optimal US financial policies. ++ Western plans like quantitative easing (QE) have produced excess liquidity. ++ Such schemes produce inflationary pressures and could reduce the national wealth of

September 8, 2011 | Full Integration Is Europe's Only Option

With more European countries falling into financial turmoil, it is time the EU took significant steps towards greater political and economic integration. ++ The current European crisis shows that a monetary union cannot function without a common fiscal and coordinated economic policy. ++ Strengthening European federalism is the only way to guarantee long-term stability for the EU and its common

October 8, 2008 | Global Crisis, Global Solution

With the financial crisis teetering on the verge of global contagion, a coordinated, worldwide effort is needed to avert a further calamity. ++ “There is inherent tension as finance becomes global but its regulation remains national.” ++ Solutions include a global stimulus program with different countries using different tools: recapitalizing banks for psychological purposes and expanding

October 6, 2008 | Potential EU Monetary Crisis - Recapitalize Now

Despite the success of some initial bank bailouts granted by the EU, such as Fortis, Europe is still short of an overall financial strategy. ++ Three things are needed: first, money to recapitalize the banking sector; second, a semi-permanent EU crisis committee to make financial decisions; and third, clear rules indicating when to recapitalize. ++ Sarkozy was right to support a EUR 300 billion

September 26, 2008 | A New Financial Ethos Needed

The financial crisis evinces the exigent need for a “Global Monetary Authority.” ++ No international framework exists for dealing with such crises; the vacuum is perilous. ++ Financial wealth is shifting to the East; the result will be a “clash of philosophies,” in which the American financial system will be contested. ++ The GMA would “set the tone for capital

August 13, 2008 | The Rich Must Get out of the Economic Driver's Seat

The financially emerging world cannot be ignored by rich nations in economic negotiations. ++ Because emerging nations play an increasingly large role in world consumption and growth, the G7/G8 is not the appropriate forum for macro-financial matters any more. ++ To prevent enduring global instability, exchange rate provisions and their repercussions in global macroeconomic supervision must be

March 26, 2008 | The Fed and the ECB Face Different Dilemmas

The differences in transatlantic mortgage systems are causing the Fed and the ECB to deal with housing crisis in contrasting ways. ++ While the Fed keeps cutting interest rates to make up for the huge losses in capital of US banks, the EU is focusing on inflation control. ++ The Fed’s mandate is to guarantee financial and monetary stability - a commitment which may eventually require the

March 5, 2008 | Before Cutting Interest Rates, Consider Inflation

The global credit crisis calls for cautious monetary policy. ++ Central banks need to take the risks of inflation seriously and avoid unnecessary interest-rate cuts. ++ The ECB should serve as a model for other central banks - it has ignored calls for interest-rate cuts and instead responded to the credit crunch by “opening wide the discount window and performing pragmatically its role as lender

May 31, 2007 | Bruegel Says Worldwide Exchange Rates Adjustment Would Fight Current Account Deficits

The March 2007 Bruegel Policy Brief reveals that imbalances in global current account positions are not sustainable and need adjustment. A 15% depreciation of the dollar and an appreciation of Asian currencies is needed in order to:

• reduce the US current account deficit,
• faciliate China’s focus on domestic demand and reduce its accumulation of foreign exchange reserves, and
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