Market versus policy Europeanisation: has an imbalance grown over time? Bruegel Policy Contribution Issue #1 January 2020

This Policy Contribution tests the hypothesis that an imbalance has grown in Europe over the last few decades because markets have integrated to a greater extent than Europeanlevel policymaking, potentially creating difficulties for the democratic process in managing the economy. This hypothesis has been put forward by several authors but not so far tested empirically. To evaluate the process of European market integration – or market Europeanisation – over the last few decades, we assess intra-European trade and intra-European capital flows. Any estimate of policy integration, or Europeanisation, meanwhile, is fraught with difficulties and only proxies can be measured. Our preferred proxy is the number of employees of the European institutions and agencies relative to the aggregate number of public employees in national administrations in the European Union. The assumption is that European public employees generate, implement and oversee European policies and thus their relative number is a proxy for the development of European policies. An alternative indicator of policy Europeanisation is the relative frequency of European Union news in major national media outlets, as a proxy for the relevance to the public of European policies. Our results show that, measured by our proxies, policy Europeanisation has developed more rapidly than market Europeanisation, measured on the basis of both trade and capital flows. It is however also noted that the relative number of public employees has outpaced the relative frequency of European Union news in the media, possibly indicating a technocratic slant in policy Europeanisation. Further research could test the robustness of our results, in particular by using other measures of policy Europeanisation, such as the impact of European legislation on national laws and regulations

Credit risk mitigation in central bank operations and its effects on financial markets - the case of the Eurosystem

This paper reviews the role and effects of the collateral framework which central banks, and in particular the Eurosystem, use in conducting temporary monetary policy operations. First, the paper explains the design of such a framework from the perspective of risk mitigation, which is the purpose of collateralisation. The paper argues that, by means of appropriate risk mitigation measures, the residual risk on any potentially eligible asset can be equalised and brought down to the level consistent with the risk tolerance of the central bank. Once this result has been achieved, eligibility decisions should be based on an economic cost-benefit analysis. Second, the paper looks at the effects of the collateral framework on financial markets, and in particular on spreads between eligible and ineligible assets.

Central bank cooperation during the great recession

During the Great Recession, central banks went well beyond their normal operations and provided liquidity in unlimited amounts, in foreign currency and to foreign banks. Central bank cooperation took the form of a swap network, and amounted to an episode of global monetary policy. However, though bank cooperation will continue to contribute to global governance, the swap network should not be made permanent and given an institutional basis to provide international lending of last resort. Swaps are a monetary policy tool and should continue to be decided on by central banks like all other monetary policy tools,to avoid impinging on their independence, which a difficult historical process has shown to be the best basis for price stability. In comments appended to this Policy Contribution, Edwin Truman, Senior Fellow, Peterson Institute for International Economics, concludes in favour of making the swap network permanent, while William Dudley, President of the Federal Reserve Bank of New York, stresses the importance of central banks around the world being able to coordinate closely so that there can be a viable, credible backstop on a global basis

Note on the interactions between payment systems and monetary policy. Bruegel Special Report, February 2018

This paper analyses the interactions between, on one hand, monetary policy and financial stability responsibilities of the ECB and, on the other hand, Post-Trading-Financial Market Infrastructures. In the author's opinion, payment Systems are critical for monetary policy while Central Counter Parties (CCPs) are critical for financial stability. However, in stressed conditions CCPs can be the source of risks also for monetary policy

Sovereign defaults during the Great Depression: the role of fiscal fragility

The debt crisis of the early 1930s was probably the largest and most widespread in history. The defaults of national and sub-national governments were pivotal events of the Great Depression and contributed to shaping post-World War II finance in the United States and worldwide. I study the role of a so-far largely unexplored factor - fiscal fragility - in the crisis. In order to do this, I construct and analyse a dataset comprising a new measure of default size and new estimates of the size and composition of public debts for around 25 countries. The data accounts for maturity structures, sub-national borrowing as well as other key characteristics of debt burdens. I show econometrically that the severe deterioration in public revenues experienced by national and sub-national governments in a number of countries was a key determinant of the defaults above and beyond the Great Depression income shock. Countries hardest hit by the slump were more likely to renege on their external debts at both the national and subnational level, but countries whose public revenues fell more moderately were able avoid or limit the size of default. I furthermore show that the collapse in public revenues was not part of an explicit strategy to counter the slump through an active fiscal policy. On the contrary, the evidence indicates that fiscally weak countries saw their public expenditures collapse alongside revenues

Panel Presentation "A New Epoch in Central Banking?"

2015年6月16日 於:早稲田大学国際会議場 井深大記念ホー

Reappraisal of birdshot retinochoroiditis (BRC): a global approach

Background: This study aimed to readjust the appraisal of birdshot retinochoroiditis (BRC) in light of a global approach, including the full array of investigational procedures. Patients and methods: This retrospective study reviewed charts of BRC cases treated in the uveitis clinic of our center between 1995 and 2011. We identified 25 patients with BRC; of these, 19 had sufficient data for inclusion in the study. Patients were examined with a standard clinical approach for inflammatory disorders, including dual fluorescence angiography with fluorescein and indocyanine green, perimetry, and laser flare photometry, both at presentation and during follow-up. Spectral optical coherence tomography (OCT) was performed when available. Disease characteristics and evolutionary patterns were reported. Results: Human leucocyte antigen was positive for the A29 allele in all patients. The mean age at presentation was 49.6 ± 10.0years, the mean diagnostic delay was 21.5 ± 18months, and the mean follow-up was 85 ± 60months. Out of 19 patients, three presented with mutton-fat keratic precipitates (KPs), three had no depigmented lesions at presentation, and eight did not fulfill the recommended criterion of three depigmented peripapillar lesions. Cystoid macular edema (CMO) at entry was present in 8/19 cases. Perimetric anomalies were noted in all patients at presentation. In 92% of cases, fluorescein findings included disc hyperfluorescence, retinal vasculitis of large vessels, and leakage from medium-sized and small vessels. In all patients, a (pseudo)-delay was noted in the arterio-venous circulation time (mean venous dye appearance = 42.1 ± 13.1s), which reflected massive capillary leakage. At presentation, all patients exhibited indocyanine green angiographic signs, including hypofluorescent dark dots, vessel fuzziness, and areas of diffuse late hyperfluorescence. This allowed early diagnosis in 3/19 patients (16%) without birdshot fundus lesions at presentation. Conclusions: BRC is a granulomatous uveitis, and mutton-fat KPs do not exclude the disease. When BRC is suspected, indocyanine green angiography is crucial to allow early diagnosis and to monitor the evolution of choroiditis. Perimetry is an obligate investigation for diagnosis and follow-up. CMO is less frequent than stated earlier. Scores of fluorescein and indocyanine green angiographic signs indicated that choroiditis responded readily to therapy, but retinitis was relatively resistant to therap

Credit risk mitigation in central bank operations and its effects on financial markets - the case of the Eurosystem

This paper reviews the role and effects of the collateral framework which central banks, and in particular the Eurosystem, use in conducting temporary monetary policy operations. First, the paper explains the design of such a framework from the perspective of risk mitigation, which is the purpose of collateralisation. The paper argues that, by means of appropriate risk mitigation measures, the residual risk on any potentially eligible asset can be equalised and brought down to the level consistent with the risk tolerance of the central bank. Once this result has been achieved, eligibility decisions should be based on an economic cost-benefit analysis. Second, the paper looks at the effects of the collateral framework on financial markets, and in particular on spreads between eligible and ineligible assets

Fault diagnosis by multisensor data: A data-driven approach based on spectral clustering and pairwise constraints

This paper deals with clustering based on feature selection of multisensor data in high-dimensional space. Spectral clustering algorithms are efficient tools in signal processing for grouping datasets sampled by multisensor systems for fault diagnosis. The effectiveness of spectral clustering stems from constructing an embedding space based on an affinity matrix. This matrix shows the pairwise similarity of the data points. Clustering is then obtained by determining the spectral decomposition of the Laplacian graph. In the manufacturing field, clustering is an essential strategy for fault diagnosis. In this study, an enhanced spectral clustering approach is presented, which is augmented with pairwise constraints, and that results in efficient identification of fault scenarios. The effectiveness of the proposed approach is described using a real case study about a diesel injection control system for fault detection