The Limits of Surveillance and Financial Market Failure Lessons from the Euro-Area Crisis

by Shigehara, Kumiharu

• ISBN13: 9781137471468
• ISBN10: 1137471468
• Format: Hardcover
• Copyright: 2014-12-10
• Publisher: Palgrave Macmillan

Summary

The Euro-area crisis, which erupted only a few years after the outbreak of the global financial and economic crisis, revealed weaknesses in regional as well as global frameworks for financial and economic crisis prevention. In fact, neither regional surveillance within the European framework nor global surveillance by international institutions such as the IMF and the OECD was effective in preventing such large-scale crises in developed countries. Can more effective surveillance be put in place to prevent their recurrence?

In this book, first-class economists with rich experience in economic and financial policy-making address a broad range of difficult policy issues. They examine the roles of surveillance by international institutions as well as micro- and macro-prudential policies, their mixes and their coordination with monetary policies for achieving financial stability while promoting better macroeconomic performance. Based on this analysis, the book also examines economic as well as political forces at work in order to understand the dynamics of the Euro-area crisis that erupted only a few years after the outbreak of the global financial and economic crisis. It reveals that the crisis was actually balance-of-payments induced, deriving from single-currency tensions as well as excessive sovereign debt. It emphases that the sustainability of the Euro area crucially depends on structural reform in both surplus and deficit countries within the area to promote convergence of economic performance.

Author Biography

Kumiharu Shigehara has had a distinguished career as both an international civil servant and a Japanese central banker. Shigehara started his professional career at the Bank of Japan in 1962 after having received his degree from the University of Tokyo where he was honoured with the Hozumi Scholarship, a special award for the most promising student of the Law Faculty. The University of Liege honored Shigehara with the degree of Doctor honoris causa in 1998, in recognition of his contributions to international economic policy co-operation. Shigehara is currently President of the International Economic Policy Studies Association and devotes himself to delivering lectures and speeches at seminars and conferences in Japan and abroad as well as contributing papers and articles on domestic and international economic and monetary policy issues to Japanese and foreign periodicals.

Table of Contents

Introduction; Kumiharu Shigehara
1. The Limits of Surveillance and Financial Market Failure; Kumiharu Shigehara
2. Global and Regional Surveillance; Andre Icard
3. Surveillance Failure or Systemic Failure?; Lelf Pagrotsky
4. The Role of Surveillance; Val Kromzay
5. Beyond Surveillance: Reducing the Risk of Financial Crises; Paul Atkinson
6. How Should Micro-Prudential Control be Strengthened to Prevent Local and Global Financial Market Failure?; Jeffrey Shafer
7. Financial Market Failures and their Remedies; Carol Sirou
8. On the Connection between Monetary Policy and Regulation of Banking and Financial Markets; Stephen Axilrod
9. Macro-Prudential Policy and Bank Systemic Risk; Blundell-Wignall and Caroline Roulet
10. Risk, Reward and Bank Resilience; Charles Goodhart
11. Can Europe Get its Political Act Together? Alternative Scenarios for the Euro Area; William White
12. More Effective Management of the Euro-Area; Gunter Baer
13. Executive Summary; Robert Price
14. Overview Report; Robert Price and Nicholas Vanston