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The Financial Turmoil and EU Policy Co‐operation in 2008

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  • LUCIA QUAGLIA
  • ROBERT EASTWOOD
  • PETER HOLMES

Abstract

This article analyses the response of the European Union (EU) to the financial crisis in 2008 under the headings of liquidity, recapitalization and ownership of banks, macroeconomic policies and regulatory policy. It is argued that although at the onset of the crisis governments tended to focus on national‐level responses, they quickly realized that international co‐ordination would be required. This proved difficult to achieve in many areas, although monetary policy was an exception. Here co‐ordination was rapid, not only in the euro area but also between the European Central Bank and other EU national central banks. Even so, within the euro area, the lender of last resort function was carried out by national central banks. Fiscal policy and bank recapitalization were similar across countries, but independently agreed. Competition rules were the one supranational EU regime, but did not act as a significant constraint on Member States.

Suggested Citation

  • Lucia Quaglia & Robert Eastwood & Peter Holmes, 2009. "The Financial Turmoil and EU Policy Co‐operation in 2008," Journal of Common Market Studies, Wiley Blackwell, vol. 47(s1), pages 63-87, September.
    • Handle: RePEc:bla:jcmkts:v:47:y:2009:i:s1:p:63-87
    DOI: 10.1111/j.1468-5965.2009.02014.x
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    References listed on IDEAS

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    1. Ms. María Nieto & Mr. Garry J. Schinasi, 2007. "EU Framework for Safeguarding Financial Stability: Towards an Analytical Benchmark for Assessing its Effectiveness," IMF Working Papers 2007/260, International Monetary Fund.
    2. Dirk Schoenmaker & Sander Oosterloo, 2005. "Financial Supervision in an Integrating Europe: Measuring Cross‐Border Externalities," International Finance, Wiley Blackwell, vol. 8(1), pages 1-27, March.
    3. International Monetary Fund, 2006. "Euro Area Policies: Selected Issues," IMF Staff Country Reports 2006/288, International Monetary Fund.
    4. Maria J. Nieto & Garry J. Schinasi, 2008. "Towards an EU Framework for Safeguarding Financial Stability," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 6(03), pages 27-36, October.
    5. repec:ces:ifodic:v:6:y:2008:i:3:p:14567250 is not listed on IDEAS
    6. Ignazio Angeloni, 2008. "Testing times for global financial governance," Essays and Lectures 2, Bruegel.
    7. Louis W. Pauly, 2008. "Financial Crisis Management in Europe and Beyond," Contributions to Political Economy, Oxford University Press, vol. 27(1), pages 73-89.
    8. Maria J. Nieto & Garry J. Schinasi, 2008. "Towards an EU Framework for Safeguarding Financial Stability," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 6(3), pages 27-36, October.
    9. Donato Masciandaro & Marc Quintyn (ed.), 2007. "Designing Financial Supervision Institutions," Books, Edward Elgar Publishing, number 12684.
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    Cited by:

    1. Amy Verdun, 2009. "Economic Developments in the Euro Area," Journal of Common Market Studies, Wiley Blackwell, vol. 47(s1), pages 233-257, September.
    2. Dermot Hodson & Lucia Quaglia, 2009. "European Perspectives on the Global Financial Crisis: Introduction," Journal of Common Market Studies, Wiley Blackwell, vol. 47(5), pages 939-953, November.
    3. Salines, Marion & Glöckler, Gabriel & Truchlewski, Zbigniew & del Favero, Paola, 2011. "Beyond the economics of the euro - analysing the institutional evolution of EMU 1999-2010, September 2011," Occasional Paper Series 127, European Central Bank.
    4. Nedelchev, Miroslav, 2015. "Coordination of banking regulation in the EU," MPRA Paper 66073, University Library of Munich, Germany, revised 2015.
    5. Lucia Quaglia, 2009. "The ‘British Plan’ as a Pace‐Setter: The Europeanization of Banking Rescue Plans in the EU?," Journal of Common Market Studies, Wiley Blackwell, vol. 47(5), pages 1063-1083, November.
    6. Salines, Marion & Glöckler, Gabriel & Truchlewski, Zbigniew & del Favero, Paola, 2011. "Beyond the economics of the euro - analysing the institutional evolution of EMU 1999-2010," Occasional Paper Series 127, European Central Bank.

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