Greece is still in the news. Not surprising, since the European Union (EU) has never had such a huge problem as this with a member country. I’ve written a lot on the subject already and don’t want to belabor the point. But I’ll try to summarize here (data from Eurostat in billions of euros). Background. […]
After the Stress Test: Lending in Times of Uncertainty
European banks have just made it through the latest round of stress tests. But now what? Will lending make a come back? Looking toward the future, do these tests really guarantee a clean bill of health? These are just a few of the questions that many people are asking themselves. But really, one question sums […]
The ECB should focus on growth, not just inflation!
The European Central Bank (ECB) plan to lower the official interest rate from 0.15% to 0.05% will not work. What’s the difference between 0.05% and 0.15%? Nothing. There will be no increase in requests or approvals for loans resulting from this 0.1% cut. In July 2012, after lowering the interest rates from 1% to 0.75%, Mario […]
A New Monetary Policy?
After the injection of capital announced by Mario Draghi, President of the European Central Bank (ECB), I stopped to reexamine what I knew about monetary policy and what I believe I know now. What conclusion did I reach? At first I thought, “This is not the monetary policy that I studied and have taught for […]
What’s Going On with the Spanish and European Banking System?
The other day, a reporter asked me three questions about the current state of Spanish and European banking. Among all the areas of economic analysis, I find monetary economics and banking most interesting. In 1992, together with three coauthors, I published one of the first articles about general equilibrium economics that had the word “banking” […]
