After 10 months on Twitter I finally decided to publish a blog (still in construction) where I could post my recent texts or presentations, making them available beyond my summaries in tweets. I am also adding some older texts from my eight years at the ECB, choosing mainly the ones with relative theoretical interest and […]
Monetary Union, Banking Union and Capital Markets Union are deeply intertwined. In this speech at a Conference organised by the European University Institute, FBF, Florence 25th April 2019, I attempt to justify why a European safe asset is a linchpin of the three projects. None of them can reach a smooth and full completion without it. Member States and European policy makers must now take seriously the creation of such vital component of the European financial architecture
This is my farewell speech at the end of my mandate as the ECB Vice President in May 2018. I addressed the problems with the initial design of Monetary Union, the challenges it is facing and the reforms necessary to improve its efficiency and robustness.
An old text from 2013, later published in the Journal of Macroecnomics 39 (2014) 250-259, about a reinterpretation of the European crisis. it has been read and quoted over the years. I debunk the view that fiscal policy was the culprit, and draw attention to the banking sectors of core and peripheral countries, responsible for financing
the credit boom that created the imbalances and vulnerabilities that later were at the centre
of the crisis. The increase of debt ratios in the periphery until 2007 was more significant for the private sector than for the public sector. The crisis has been as much a banking crisis as a sovereign debt crisis and to avoid similar future risks a European Supervisor and a Resolution
Authority are essential.
Announcing a new semi-structural model being developed at the ECB, I enumerate the features that a good macroeconomic model for policy analysis should have. DSGE models do not fully fill all the criteria. That they have been evolving with lots of ad-hoc features to better fit the data, is in itself an admission of the limitations of their purw vwrsions.
In this text from April 2016 I enumerated some basic principles of macroprudential policy, a much needed new dimension of regulatory policy to improve the financial sector resilience and smooth the financial cycle. I address some methodological problems. I point to some early contributions to what is now know as GDP-at-Risk analysis later developed by the IMF. It also originated the introduction of two new financial stress indicators by the ECB (see the May 2018 issue of the FSR). The financial stability risk index (FSRI) predicts the near-term recessionary effects of
financial stress, while the cyclical systemic risk indicator (CSRI) anticipates the
medium-term consequences of financial instability
In a speech on May 4th 2018, I analysed the past and future of ECB´s monetary policy. I distinguished four phases in past policy, portraying the ECB evolution from an almost monetarist central bank to a modern one. I discuss the present challenges, criticize the concept of the so-called “natural rate of unemployment”, the problems with the Phillips curve and possible changes to the monetary framework of major central banks, a subject I address in another text in more detail.
A text for an international conference in Milan, September 2018. The background is the concern about the potential fragmentation of the multilateral system of international governance that has been built up after 1945. In the financial regulation domain these fears have not yet materiliased. Further regulation has stopped though. Summing up, progress was made in stepping up regulation to make the system safer but, despite the big financial crisis, no deep structural change was introduced to properly tame finance and debt, making the system prone to new crises.
A slide presentation on November 5th 2018 on a topical issue. It provides an overview of what the Euro Area would need to face the next economic downturn, whenever it comes…
In October 2018 I delivered the Robert Mundell Annual Lecture at the School of Advanced International Studies (SAIS), The John Hopkins University in Bologna. I addressed the connection between the theory of Optimal Currency Areas and the evolution of the euro area by organising my exposition around three questions: 1) What was the role of the OCA theory in influencing the European monetary union initial design; 2) Does the OCA theory help to explain the reasons for the difficulties encountered by the euro area or are other narratives necessary?; 3) and finally, what advice does the theory provide about initiatives to improve the euro area stability and robustness.
A text from May 2018 defending the need for a real Capital Markets Union, a project that has been neglected by European authorities