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The European Crisis and the role of the financial system

Author

Listed:
  • Vitor Constancio

    (European Central Bank)

Abstract

The paper aims to provide a deep rationale for banking union in the Euro Area. It shows that the banking sectors of core and peripheral countries were 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.

Suggested Citation

  • Vitor Constancio, 2013. "The European Crisis and the role of the financial system," Special Conference Papers 15, Bank of Greece.
    • Handle: RePEc:bog:spaper:15
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    File URL: http://www.bankofgreece.gr/BogEkdoseis/SCP201315.pdf
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    Cited by:

    1. repec:spo:wpmain:info:hdl:2441/4aoteiu16h99cpn1k5mh5eioj0 is not listed on IDEAS
    2. Hüttl, Pia & Kaldorf, Matthias, 2024. "The transmission of bank liquidity shocks: Evidence from the Eurosystem collateral framework," Discussion Papers 04/2024, Deutsche Bundesbank.
    3. Jerome Creel & Paul Hubert & Fabien Labondance, 2015. "The intertwining of financialisation and financial instability," Documents de Travail de l'OFCE 2015-14, Observatoire Francais des Conjonctures Economiques (OFCE).
    4. Hartmann, Philipp & Smets, Frank, 2018. "The first twenty years of the European Central Bank: monetary policy," Working Paper Series 2219, European Central Bank.
    5. Roberta De Santis & Tatiana Cesaroni, 2016. "Current Account ‘Core–Periphery Dualism’ in the EMU," The World Economy, Wiley Blackwell, vol. 39(10), pages 1514-1538, October.
    6. Theodoros S. Papaspyrou, 2015. "EMU 2.0 Drawing Lessons From the Crisis - a New Framework For Stability and Growth," Working Papers 192, Bank of Greece.

    More about this item

    Keywords

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    JEL classification:

    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G01 - Financial Economics - - General - - - Financial Crises

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