The Interaction of Political, Fiscal and Financial Stability: Lessons from the Crisis
edited by Ernest Gnan, Vienna, 2013, ISBN 978-3-902109-66-8

The current financial, economic and fiscal crisis is among other things characterised by complex interrelations between financial, fiscal, macroeconomic and political instability. One instability breeds another, with feedback loops generating self-reinforcing adverse cycles: The financial crisis triggered the 'Great Recession'. Countermeasures by governments – to save banks and bolster up aggregate demand – ultimately jeopardized fiscal sustainability and bred the fiscal crisis. The latter in turn destabilised sovereign bond markets and banking systems in several countries. Political instability resulted from the substantial fiscal consolidations forced upon governments in the light of threatening or actual loss of access to financial market financing, and the accompanying deep recessions and sharp increase in unemployment. Political instability in turn further erodes economic and financial market confidence, thus worsening short and long-term economic and fiscal prospects, and further aggravating financial instability. In the EU and more specifically the Euro Area, multiple channels of spillovers and contagion turn the problems from purely national phenomena to ones of EU-wide and ultimately even global scope. Thus, apart from national political processes, Euro Area and EU-wide economic governance has been criticized for not addressing reform needs decisively, thus prolonging and deepening the cycle of instability.

Developing Distress Resolution Procedures for Financial Institutions
by Clas Wihlborg, Vienna, 2012, ISBN 978-3-902109-65-1

This paper focuses on the need for a lex specialis for resolution of insolvent banks and other financial institutions serving similar functions, and on requirements for making resolution procedures effective. After a review of the objectives of general insolvency law and the special characteristics of banks and the financial system, approaches to resolution procedures in a few 'model countries' are described. The issues that require attention in legislation for resolution procedures are identified as the contagion issue, the valuation issue, the predictability issue, the information issue, the coverage issue, the funding issue and the cross-border issue. Complementary reforms of the financial architecture that would enhance the effectiveness of legislation for resolution procedures are discussed as well.

The ESRB at 1
edited by Stefan Gerlach, Ernest Gnan and Jens Ulbrich, Vienna, 2012, ISBN 978-3-902109-64-4

SUERF – The European Money and Finance Forum, the Deutsche Bundesbank and the Institute for Monetary and Financial Stability (IMFS) took the opportunity of the first anniversary of this new institution to organise a joint conference in Berlin on 8-9 November 2011. The purpose of this event was to take stock of first experiences with the ESRB; to discuss current issues in the field of macroprudential supervision, including the integration of macro-financial elements into macroeconomic models, the measurement and indicators of systemic risk, macroprudential tools and their effectiveness; and to identify forthcoming challenges for the ESRB and macroprudential supervision at large. This SUERF Study forms the conference proceedings from the event, with the chapters being a selection of the papers and speeches presented at the event.

Future Risks and Fragilities for Financial Stability
edited by David T. Llewellyn and Richard Reid, Vienna, 2012, ISBN 978-3-902109-63-7

In March 2012 a conference, organised jointly by the ICFR and SUERF, on "Future Risks and Fragilities for Financial Stability", explored what the next pressure points for financial stability might be, how these may arise from the response to the last financial crisis, and how the industry and the regulators can prepare for them. In order to discuss this theme, the conference brought together a select group of academics, industry practitioners and policymakers to discuss a range of connected issues, mainly incentives and market discipline, regulation, competition and shadow banking, and size and structure of business models.

New Paradigms in Banking, Financial Markets and Regulation?
edited by Morten Balling, Frank Lierman, Freddy Van den Spiegel, Rym Ayadi and David T. Llewellyn, Vienna, 2012, ISBN 978-3-902109-62-0

On May 11-12, 2011, SUERF, the Belgian Financial Forum, the Brussels Finance Institute and the Centre for European Policy Studies (CEPS) jointly organised the 29th SUERF Colloquium New paradigms in money and finance? The papers included in this SUERF Study are based on contributions to the Colloquium. The 2008-11 financial crisis has demonstrated unsatisfactory performance in financial institutions and in financial regulation and supervision all over the world. The contributors to the present volume look with critical eyes on financial theories, supervisory structures, (mis)pricing of risk and distorted incentives, risk management models and procedures, conflicts of interest and bank strategies. Their perspectives are quite different, but they share the ambition of finding improved analytical, organizational or managerial approaches so that decisionmakers have a better chance of showing good performance in the future. In essence, they are looking for new paradigms in banking, financial markets and regulation.

edited by Morten Balling and David T. Llewellyn

New Paradigms in Monetary Theory and Policy?
edited by Morten Balling and David T. Llewellyn, Vienna, 2012, ISBN 978-3-902109- 61-3

On 11-12 May 2011, SUERF and the Belgian Financial Forum, in association with the Brussels Finance Institute and the Centre for European Policy Studies (CEPS) organized the 29th SUERF Colloquium “New Paradigms in Money and Finance?” All the papers in the present SUERF Study are based on contributions to the Brussels Colloquium.

by Mathias Schmit, Laurent Gheeraert, Thierry Denuit, Cédric Warny

Roles, Missions and Business Models of Public Financial Institutions in Europe
by Mathias Schmit, Laurent Gheeraert, Thierry Denuit, Cédric Warny, Vienna, 2011, ISBN 978-3-902109-60-6

In Europe, the balance between publicly owned and privately owned financial institutions varies through time and from country to country. Historically, nationalisations and privatisations have moved the balance backwards and forwards. So has the recent financial crisis. Mathias Schmit, Laurent Gheeraert, Thierry Denuit and Cédric Warny from the Solway Brussels School of Economics and Management have carried out a huge research project in which they analyse the roles and missions of financial institutions with public ownership and involvement in 32 European countries. They have published their results in the report: Public Financial Institutions in Europe, European Association of Public Banks, Brussels, March 2011.

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by Jens Forssbæck

Divergence of risk indicators and the conditions for market discipline
by Jens Forssbæck, Vienna, 2011, ISBN 978-3-902109-59-0

Abstract

Accurate measurement of bank risk is a matter of considerable importance for bank regulation and supervision. Current practices in most countries emphasize reliance on financial statement data for assessing banks' risk. However, the possibility of increased reliance on market-based risk indicators has been a topic for academic and regulatory debate for a long time. Market monitoring of bank risk has typically been tested by regressing market-based risk indicators on various benchmark indicators (such as accounting ratios and credit ratings) to detect whether the market tracks bank risk. This approach overlooks the methodological 'unobservability' problem that testing one imperfect proxy indicator against another, when the true value (in this case, a bank's 'true' risk) is unknown, must yield limited conclusions as to the appropriateness of either indicator – particularly in the event of failure to establish a significant association.

eds. Ernest Gnan, Ryszard Kokoszczynski, Tomasz Łyziak & Robert McCauley

A joint publication with the National Bank of Poland

Monetary Policy after the Crisis
eds. Ernest Gnan, Ryszard Kokoszczynski, Tomasz Łyziak & Robert McCauley,
Vienna, 2011, ISBN 978-3-902109-58-3

On 4 March 2011, SUERF – The European Money and Finance Forum and the National Bank of Poland jointly organised a conference on the theme of: "Monetary Policy after the Crisis". Following a call for papers with a large number of submissions, the scientific committee selected 9 papers, which were grouped in three sessions addressing the following three research questions: First, what have we learnt from the crisis for the conduct of monetary policy? Second, what have we learnt from the crisis for the coordination of monetary, fiscal and macroprudential policies. And third, how did the Monetary Transmission Mechanism during the crisis function, and what can we expect for the future?

eds. Frank Browne, David T. Llewellyn and Phil Molyneux

A joint publication with the Central Bank of Ireland

Regulation and Banking after the Crisis
eds. Frank Browne, David T. Llewellyn and Phil Molyneux,
Vienna, 2011, ISBN 978-3-902109-57-6

The Central Bank of Ireland and SUERF organised a joint conference in Dublin on 20th September, 2010 on the general theme of Regulation and Banking after the Crisis. In the best traditions of SUERF, the programme included papers and presentations from the three main constituencies of SUERF: Central Banks (including notably the Governor of the Central Bank of Ireland), academics, and financial practitioners. As always, the papers illuminated some of the different perspectives of the three constituencies. We are grateful to the many distinguished contributors who were prepared to make powerful contributions to the conference.