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Lessons for monetary policy from the euro-area crisis

Author

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  • C.A.E Goodhart

    (London School of Economics)

Abstract

The earlier 2007/8 financial crisis generated the main lessons for monetary policy, notably that price stability does not necessarily guarantee financial stability. Nevertheless, the on-going Eurozone crisis has pointed to further lessons, notably that a single currency covering diverse states does need a Banking Union; and to problems of zero risk-weighting for sovereign debts. Without such a Banking Union, economic divergences between the Eurozone states have continued and look likely to persist.

Suggested Citation

  • C.A.E Goodhart, 2013. "Lessons for monetary policy from the euro-area crisis," Special Conference Papers 17, Bank of Greece.
  • Handle: RePEc:bog:spaper:17
    as

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    File URL: http://www.bankofgreece.gr/BogEkdoseis/SCP201317.pdf
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    References listed on IDEAS

    as
    1. Philip Lowe & Claudio Borio, 2002. "Asset prices, financial and monetary stability: exploring the nexus," BIS Working Papers 114, Bank for International Settlements.
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    More about this item

    Keywords

    Price stability; financial stability; banking union; zero lower-bound;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G01 - Financial Economics - - General - - - Financial Crises

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