Timelines of the Global Financial Crisis

The Federal Reserve Bank of New York has a website with two timelines on policy responses to the global financial crisis.

1. Financial Turmoil Timeline (showing market events, Fed policy actions and other policy actions)
2. International Responses to the Crisis Timeline (showing bank guarantees, liquidity and rescue interventions, "unconventional" monetary policy and other market interventions.

Thanks go to Manfred Jäger @ Institut der deutschen Wirtschaft Köln for these links.

PS: And here the same from the Bank of England: Timeline of Crisis Events.

Unemployment in OECD countries to approach 10% in 2010

... says OECD . This may not be surprising given that the world economy faces the sharpest downturn for the last 50 years at least. But I have been stunned by this particular figure


Source: OECD.

Some may think that Germany, the (former) export world champion, may suffer most from the shrinking world economy. But we are not quite there yet - at least in terms of unemployment.

Vortragsankündigung

Professor Mika Widgren von der Universität Turku hält am kommenden Montag einen öffentlichen Vortrag zum Thema

Strategic vs. Non-strategic Power in the EU Council: The Consultation Procedure

Ort: Institut für Wirtschaftsforschung, Halle (Lage), Konferenzraum
Zeit: Montag, 22. Juni 2009, 14 Uhr c.t. (Dauer: 90 Minuten)

Interessenten sind herzlich eingeladen.

Professor Widgrens Forschungsgebiete sind (u.a.) die Europäische Integration und hier insb. die EU Entscheidungsverfahren. Dabei verwendet er Methoden der Institutionenökonomik und der Spieltheorie.

Weitere Informationen finden sich auf den Webseiten des Graduiertenkollegs Globale Finanzmärkte und auf Professor Widgrens persönlicher Webseite.

PS: Für Gäste von außerhalb, hier Anreiseinformationen in Form einer Google-Karte, wobei A die Tiefgarage am Hansering bezeichnet, B den Standort des IWH. Fußweg über die Rathausstraße: 5 Minuten.
 

A small step for the U.S. Congress ...

... but a big step for IMF Reform, says IMF Survey, referring to the final approval of IMF reform in the U.S. Senat on June 18. Key decisions of Congress include, according to the article:

• More funding for the IMF to help tackle the global crisis under an expanded borrowing arrangement. The United States has committed to increase its credit line by up to an additional $100 billion to the IMF.
• Reform of country representation at the IMF, including greater representation (quotas) for dynamic emerging markets and enhanced voice and participation for low-income countries.
• Go-ahead for the so-called “fourth amendment,” a one-time allocation of Special Drawing Rights (SDRs), an international reserve asset created by the IMF in 1969 to supplement the official reserves of member countries.
• Providing expanded investment authority to the IMF as a key part of a new income model to finance its activities, making it less dependent on earning revenue from interest paid on loans.
• Vote on a proposal for limited gold sales by the IMF, consistent with the agreed framework for the Fund’s new income model. more...

Almost in tandem with the U.S. Senat, the EU Council approved additional IMF funding of €75 billion. Cf. SCHLUSSFOLGERUNGEN DES VORSITZES, paragraph 24 on page 9. Funny, this went largely unnoticed in the news, even though at the current exchange rate the EU's €75m exceed the US's $100bn.

Eine neue Abkürzung: ESRB

Ergänzung zum vorigen Blog-Post:

ERSB ist das European Systemic Risk Board, was auf Deutsch mit Europäischer Ausschuss für Systemrisiken übersetzt wird. Der Ausschuss wird in Frankfurt bei der Europäischen Zentralbank angesiedelt. Er soll Risiken im Finanzsystem identifizieren, vor Krisen warnen und im Ernstfall Maßnahmen der Krisenbekämpfung koordinieren. Auf der vor wenigen Tagen zu Ende gegangenen Tagung des Europäischen Rats (Brüssel, 18./19. Juni) haben die Briten ihre "Paranoia" überwunden und im Austausch gegen einige Zugeständnisse seitens der anderen Länder die Schaffung dieses zentralen EU-Gremiums für die sog. makroprudenzielle Aufsicht akzeptiert.

Mehr zum Hintergrund dazu bieten folgende Links:

• Reuters beschreibt kurz die Ratsbeschlüsse von Brüssel: ECB-dominated EU financial risk board to pick own chair.
• Für die ganz Wissbegierigen hier die Originalquelle zu den Ratsbeschlüssen: Schlussfolgerungen des Vorsitzes, wo sich auf Seite 6ff die entscheidenden Passagen finden.
• Das Bundesfinanzministerium hat die Problematik im Vorgriff schon ganz gut (und vor allem kurz) zusammengefasst: Starke EU-Finanzaufsicht ist wichtig.
• EZB-Ratsmitglied Lorenzo Bini-Smaghi ordnet die Regulierungsbestrebungen der EU in einen breiteren ökonomischen Rahmen ein: Going Forward: Regulation and Supervision after the Financial Turmoil.

Ein neuer "EU-Kontrollrat"

Kurz nach Draft of President Obama's Financial Regulation Proposal hat der EU-Gipfel bei der umfassenden Reform der europäischen Finanzaufsicht einen Durchbruch erzielt: Künfitig wählen alle 27 Zentralbankchefs die Führung des neuen "EU-Kontrollrates" und soll helfen, Krisen im Banksystem zu verhindern. Konkrete Gesetzesvorschläge will EU-Kommissionspräsident José Manuel Barroso im Herbst vorlegen. So berichteten Zeit-Online und FAZ heute morgen.

Draft of President Obama's Financial Regulation Proposal

The New York Times reports about President Obama's plan to reshape financial regulation. There is also a link to the original text of Obama's proposal. Also in the NYT there is a background article on how the plan was drafted: Obama Sought a Wide Range of Views on Finance Rules.

With his regulation plan, President Obama wants to meet five key objectives. Reforms should ...

1. Promote robust supervision and regulation of financial firms
2. Establish comprehensive regulation of financial markets
3. Protect consumers and investors from financial abuse
4. Provide the government with the tools it needs to manage financial crises
5. Raise international regulatory standards and improve international cooperation

More on this here.

Collateral damage of the financial crisis: US antitrust law?

George L. Priest, professor of law & economics at Yale Law School and antitrust specialist, sees the Obama administration throwing "... a bomb at modern antitrust law". This is the punchline of his article The Justice Department's Antitrust Bomb in the Wall Street Journal. From the article:

Assistant Attorney General for Antitrust Christine Varney claims that the Justice Department can aid economic recovery by prosecuting businesses that have been successful in gaining large market shares. In her announcement last month she argued that "many observers agree" that our current recession reflects "a failure of antitrust" and "inadequate antitrust oversight." ...

What does Ms. Varney propose as an alternative approach? [...] Her basic proposal is to transform American antitrust law to more closely resemble that of Europe. She states that American antitrust policies have "diverged too frequently" from those of the Europe, and that "[w]e will focus our efforts on working through our previously divergent policies regarding single-firm conduct and pursuing vigorous enforcement on the [monopolization] front." more...

Professor Priest disagrees:

This is a huge mistake. The principal reasons American and European approaches to antitrust diverge are that the operative legal standards are different and that the Europeans have not adopted a tradition of rigorous economic analysis. [...] In the U.S. -- Ms. Varney's views aside -- success in competition is rewarded. In Europe it is suspect [...] more...

Strong stuff!