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dc.contributor.authorKooths, Stefanen_US
dc.contributor.authorvan Roye, Björnen_US
dc.date.accessioned2012-10-01en_US
dc.date.accessioned2012-10-11T14:44:52Z-
dc.date.available2012-10-11T14:44:52Z-
dc.date.issued2012en_US
dc.identifier.urihttp://hdl.handle.net/10419/64831-
dc.description.abstractThe Eurosystem has been pursuing a crisis management policy for more than four years now. This policy aims primarily at maintaining financial stability in the euro area by providing vast liquidity support to commercial banks that are operating in nationally segmented banking systems. As a side effect, the national central banks substitute money market operations for cross-border capital flows. The national central banks are thus increasingly engaging in substantial balance-of-payments financing, and financial risks are being shifted from investors to European taxpayers via the Eurosystem. Symptomatically, this shows up in exploding TARGET2 positions in the national central banks' balance sheets. The longer this process continues, the stronger the centrifugal forces become that ultimately might break up the single currency. Instead of a fiscal union, a euro-area-wide regulatory approach is required. In addition to establishing a uniform scheme for banking regulation, supervision and resolution, we recommend that contingent convertible bonds (CoCos) be introduced to provide a major source of refinancing for the banking industry. Since CoCos cannot be introduced overnight, national and European banking resolution funds would be needed in the short run. These funds would not rescue banks but they would kick in as soon as a bank's equity is depleted in order to wind up failing banks in a systemically prudent way.en_US
dc.language.isoengen_US
dc.publisherKiel Institute for the World Economy (IfW) Kielen_US
dc.relation.ispartofseriesKiel Working Paper 1787en_US
dc.subject.jelE42en_US
dc.subject.jelE51en_US
dc.subject.jelE58en_US
dc.subject.jelF32en_US
dc.subject.jelF34en_US
dc.subject.ddc330en_US
dc.subject.keywordBalance-of-payments financingen_US
dc.subject.keywordTarget2en_US
dc.subject.keywordEurosystemen_US
dc.subject.keywordMonetary policyen_US
dc.subject.keywordFinancial crisisen_US
dc.subject.keywordEuro areaen_US
dc.subject.keywordFinancing mechanismsen_US
dc.subject.stwEuropäische Wirtschafts- und Währungsunionen_US
dc.subject.stwVerrechnungsverkehren_US
dc.subject.stwInternationaler Zahlungsverkehren_US
dc.subject.stwZahlungsbilanzungleichgewichten_US
dc.subject.stwGeldpolitiken_US
dc.subject.stwGeldschöpfungen_US
dc.subject.stwOrdnungspolitiken_US
dc.subject.stwBankenpolitiken_US
dc.subject.stwEurozoneen_US
dc.titleEuro area: Single currency - national money creationen_US
dc.typeWorking Paperen_US
dc.identifier.ppn726708348en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
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