Eurozone
BoE paper finds impatience increases austerity costs
Discussion paper finds close link between a country’s time preference and its fiscal multiplier, implying that countries wanting a slower fiscal adjustment face higher costs to austerity
Banks rush to repay LTROs at first opportunity
Repayments of the European Central Bank’s long-term refinancing operations exceed many analysts’ expectations, as 278 banks choose to pay back nearly 30% of the total
Mixed reactions from banks as ECB prepares to wind down LTROs
Repayment window for LTROs set to open on January 30; some commentators raise concerns over possible monetary tightening, while others view early repayments as sign of financial health
People: Dijsselbloem bids for Eurogroup chair; Sanusi takes reins at WAMZ
Eurozone finance ministers to elect new chair on Monday; West African Monetary Zone chair passes to Nigeria governor; Finland picks audit head
ECB’s Cœuré examines trend towards secured transactions
Benoît Cœuré highlights increasing proportion of secured money market transactions and greater use of central counterparties in Europe, but warns this can cause problems
Eurozone periphery begins latest bank repairs
Spain injects a total of €37 billion into four weakest banks; Greece estimates backstop facility requirements at €50 billion of public funds
Asmussen stresses importance of institutions for EMU
Member of the Executive Board Jörg Asmussen says genuine financial union and a stronger economic union are key priorities for 2013
IMF fears Ireland could still lose access to markets
Eighth review of extended fund facility says Ireland’s newly regained market access is ‘fragile’ and could be lost if European commitments to ESM funding and OMTs are not followed through
Target2’s missing settlement mechanism creates systemic risk
In the latest edition of the Central Banking Journal, Hans-Werner Sinn argues the lack of yearly ‘settling up’ in the European Target2 payments system is fuelling major imbalances within Europe
Draghi says resolution framework is priority for 2013
ECB chief tells European Parliament single resolution mechanism and reforms to restore competitiveness are ‘key priorities’ for 2013; gives assurances monetary policy will not be impaired
National Bank of Denmark chief says country should sign up to ‘more Europe’
Nils Bernstein warns that Denmark needs to maintain close integration with Europe or the country may find itself in a weaker position
EU leaders thrash out ECB bank supervision deal
European finance ministers reach agreement that gives the ECB supervisory powers over the largest banks; EBA rules adjusted to balance voting powers of states outside supervisory mechanism
Systemic risk in Europe heightened by Target trap
Huge Target liabilities may explain why Germany sanctioned proposals for ECB bond-buying and the formation of the ESM. But this will not solve Europe’s problems
Noyer trumpets Eurosystem response to crisis
Banque de France governor Christian Noyer believes the monetary policy adopted in the Eurosystem is a source of ‘immediate confidence and stability’
Bank of Greece upbeat on recovery prospects
Interim 2012 report on monetary policy says ‘tangible’ progress has been made in key sectors, but commentators warn optimism may be unfounded
ECB’s Cœuré champions accountability in Europe
Executive board member wants clear ‘network of responsibilities’ and advocates creation of a euro area treasury
Iceland’s Guðmundsson identifies flaw in banking union plans
Már Guðmundsson warns lack of foreign currency lender-of-last-resort provisions is an important omission from economic and monetary union plans
ECB’s Constâncio advocates sovereignty transfer
The vice-president says some aspects of decision-making should be moved from a national to a European level
Eurogroup agrees on Greek aid package
Eurozone countries agree on measures to boost Greek debt sustainability alongside a €43.7 billion ($56.5 billion) disbursement from the European Financial Stability Facility
ECB’s supervisory board must oversee all banks, Draghi says
ECB president emphasises potential for smaller financial institutions to be systemically important
Spain’s Linde hits out at countries delaying euro reform
Bank of Spain governor says sovereign debt problems are being dragged out by the slow acceptance of a 'new reality' in the monetary union
ECB’s Cœuré backs European control of national budgets
European Central Bank board member says yielding budget control to central bodies would enable countries to ‘recover’ sovereignty
Central bank gold purchases slow in third quarter
Growth of net central bank gold holdings in third quarter remains positive but decelerates compared with similar period in 2011; year-to-date holdings up 9%
IMF’s Lipton cools recovery talk
Greater euro area and US progress is needed to avoid another global downturn; more co-operation required on regulatory reform