Self-Fulfilling Crises in the Eurozone: An Empirical Test. CEPS Working Document No. 366, 22 June 2012

This paper tests the hypothesis that government bond markets in the eurozone are more fragile and more susceptible to self-fulfilling liquidity crises than in stand-alone countries. We find evidence that a significant part of the surge in the spreads of the PIGS countries (Portugal, Ireland, Greece and Spain) in the eurozone during 2010-11 was disconnected from underlying increases in the debt-to-GDP ratios and fiscal space variables, and was the result of negative self-fulfilling market sentiments that became very strong since the end of 2010. We argue that this can drive member countries of the eurozone into bad equilibria. We also find evidence that after years of neglecting high government debt, investors became increasingly worried about this in the eurozone, and reacted by raising the spreads. No such worries developed in stand-alone countries despite the fact that debt-to-GDP ratios and fiscal space variables were equally high and increasing in these countries

Strong governments, weak banks. CEPS Policy Brief No. 305, 25 November 2013

Banks in the northern eurozone have capital ratios that are, on average, less than half of the capital ratios of banks in the eurozone’s periphery. The authors explain this by the fact that northern eurozone banks profit from the financial solidity of their governments and follow business strategies aimed at issuing too much subsidised debt. In doing so, they weaken their balance sheets and become more fragile – less able to withstand future shocks. Paradoxically, financially strong governments breed fragile banks. The opposite occurs in countries with financially weak governments. In these countries banks are forced to strengthen themselves because they are unable to rely on their governments. As a result they have significantly more capital and reserves than banks in the northern eurozone. Recommendations More than in the south, the governments of northern Europe should stand up and force the banks to issue more equity. This should go much further than what is foreseen in the Basel III accord. If the experience of the southern eurozone countries is any guide, banks in the north of the eurozone should at least double the capital and the reserves as a percentage of their balance sheets. Failure to do so risks destroying the financial solidity of the northern European governments when, in the future, negative shocks force these governments to come to the rescue of their undercapitalised banks. The new responsibilities entrusted to the European Central Bank as the single supervisor in the eurozone create a unique opportunity for that institution to change the regulatory and supervisory culture in the eurozone – one that has allowed the large banks to continue living dangerously, with insufficient capital

What Germany should fear most is its own fear: An analysis of Target2 and current account imbalances. CEPS Working Document No. 368, September 2012

This paper analyzes two claims that have been made about the Target2 payment system. The first one is that this system has been used to support unsustainable current account deficits of Southern European countries. The second one is that the large accumulation of Target2 claims by the Bundesbank represents an unacceptable risk for Germany if the eurozone were to break up. We argue that these claims are unfounded. They also lead to unnecessary fears in Germany that make a solution of the eurozone crisis more difficult. Ultimately, this fear increases the risk of a break-up of the eurozone. Or to paraphrase Franklin Roosevelt, what Germany should fear most is simply its own fear

Asymptotic Solutions for Mean-Field Slab Dynamos

We discuss asymptotic solutions of the kinematic $\alpha\omega$-dynamo in a thin disc (slab). Focusing upon the strong dynamo regime, in which the dynamo number $D$ satisfies $|D|\gg1$, we resolve uncertainties in the earlier treatments and conclude that some of the simplifications that have been made in previous studies are questionable. Comparing numerical solutions with asymptotic results obtained for $|D|\gg1$ and $|D|\ll1$ we find that the asymptotic solutions give a reasonably accurate description of the dynamo even far beyond their formal ranges of applicability. Indeed, our results suggest a simple analytical expression for the growth rate of the mean magnetic field that remains accurate in the range $-200< D< -10$ (which is appropriate for dynamos in spiral galaxies and accretion discs). Finally, we analyse the role of various terms in the dynamo equations to clarify the fine details of the dynamo process.Comment: "This is an Author's Original Manuscript of an article submitted for consideration in Geophysical and Astrophysical Fluid Dynamics [copyright Taylor & Francis]; Geophysical and Astrophysical Fluid Dynamics is available online at http://www.tandfonline.com/gafd

A virtual approach to evaluate therapies for management of multiple myeloma induced bone disease: Modelling Therapies for Multiple Myeloma Induced Bone Disease

Multiple myeloma bone disease is devastating for patients and a major cause of morbidity. The disease leads to bone destruction by inhibiting osteoblast activity while stimulating osteoclast activity. Recent advances in multiple myeloma research have improved our understanding of the pathogenesis of multiple myeloma-induced bone disease and suggest several potential therapeutic strategies. However, the effectiveness of some potential therapeutic strategies still requires further investigation and optimization. In this paper, a recently developed mathematical model is extended to mimic and then evaluate three therapies of the disease, namely: bisphosphonates, bortezomib and TGF-β inhibition. The model suggests that bisphosphonates and bortezomib treatments not only inhibit bone destruction, but also reduce the viability of myeloma cells. This contributes to the current debate as to whether bisphosphonate therapy has an anti-tumour effect. On the other hand, the analyses indicate that treatments designed to inhibit TGF-β do not reduce bone destruction, although it appears that they might reduce the viability of myeloma cells, which again contributes to the current controversy regarding the efficacy of TGF-β inhibition in multiple myeloma-induced bone disease

Investigating the efficacy of bisphosphonates treatment against multiple myeloma induced bone disease using a computational model

Multiple myeloma (MM)-induced bone disease is mortal for most MM patients. Bisphosphonates are first-line treatment for MM-induced bone disease, since it can inhibit osteoclast activity and the resultant bone resorption by suppressing the differentiation of osteoclast precursors into mature osteoclasts, promoting osteoclast apoptosis and disrupting osteoclast function. However, it is still unclear whether bisphosphonates have an anti-tumour effect. In our previous work, a computational model was built to simulate the pathology of MM-induced bone disease. This paper extends this proposed computational model to investigate the efficacy of bisphosphonates treatment and then clear the controversy of this therapy. The extended model is validated through the good agreement between simulation results and experimental data. The simulation results suggest that bisphosphonates indeed have an anti-tumour effect

High altitude balloon checking our weather forecast

It talks about what we planned to do with the pocket lab and what we have tried and the results we got from the project. We also talk about the purpose of this project and what this pocket lab could help was what we wanted

How safe is a safe asset? CEPS Policy Insights No 2018-08/February 2018

The European Systemic Risk Board proposes to create a “safe asset” for the eurozone that is based on a repackaging of the risks of sovereign bonds. The hope is that this financial engineering will stabilise an otherwise unstable system of sovereign bond markets in the eurozone. We argue that a financial system that is fundamentally unstable cannot be stabilised by financial engineering. The ESRB-proposal creates the illusion that the sovereign bond markets in the eurozone can be stabilised without the need to share the risk among sovereigns. We argue that sovereign bond markets can only be stabilised vi

The fragility of two monetary regimes: The European Monetary System and the Eurozone. National Bank of Belgium Working Paper No. 243, October 2013

The purpose of these working papers is to promote the circulation of research results (Research Series) and analytical studies (Documents Series) made within the National Bank of Belgium or presented by external economists in seminars, conferences and conventions organised by the Bank. The aim is therefore to provide a platform for discussion. The opinions expressed are strictly those of the authors and do not necessarily reflect the views of the National Bank of Belgium