Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/64831 
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dc.contributor.authorKooths, Stefanen
dc.contributor.authorvan Roye, Björnen
dc.date.accessioned2012-10-01-
dc.date.accessioned2012-10-11T14:44:52Z-
dc.date.available2012-10-11T14:44:52Z-
dc.date.issued2012-
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
dc.language.isoengen
dc.publisher|aKiel Institute for the World Economy (IfW) |cKielen
dc.relation.ispartofseries|aKiel Working Paper |x1787en
dc.subject.jelE42en
dc.subject.jelE51en
dc.subject.jelE58en
dc.subject.jelF32en
dc.subject.jelF34en
dc.subject.ddc330en
dc.subject.keywordBalance-of-payments financingen
dc.subject.keywordTarget2en
dc.subject.keywordEurosystemen
dc.subject.keywordMonetary policyen
dc.subject.keywordFinancial crisisen
dc.subject.keywordEuro areaen
dc.subject.keywordFinancing mechanismsen
dc.subject.stwEuropäische Wirtschafts- und Währungsunionen
dc.subject.stwVerrechnungsverkehren
dc.subject.stwInternationaler Zahlungsverkehren
dc.subject.stwZahlungsbilanzungleichgewichten
dc.subject.stwGeldpolitiken
dc.subject.stwGeldschöpfungen
dc.subject.stwOrdnungspolitiken
dc.subject.stwBankenpolitiken
dc.subject.stwEurozoneen
dc.titleEuro area: Single currency - national money creation-
dc.typeWorking Paperen
dc.identifier.ppn726708348en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen
dc.identifier.repecRePEc:zbw:ifwkwp:1787en

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