Shadow money and the public money supply: the impact of the 2007-2009 financial crisis on the monetary system

This article explores the effects of the political reactions to the 2007–2009 financial crisis on the monetary system. It chimes in with the view that shadow banks create ‘shadow money’, i.e. private substitutes for bank deposits. The article analyses how the three main forms of shadow money – money market fund shares, overnight repurchase agreements and asset-backed commercial papers – were affected by the short-term government intervention and medium-term regulation during and after the 2007–2009 financial crisis in the United States. The analysis reveals that the measures taken between 2007 and 2014 integrated some shadow money forms in the public money supply. In the year after the Lehman collapse, the initially private shadow money supply was either publicly backstopped or de-monetised as it had broken par to bank deposits. The public backstops took on the form of emergency facilities established by the Federal Reserve and guarantees proclaimed by the Treasury. Those backstops imply that the public institutional framework to protect bank deposits was extended to some forms of shadow money during the crisis. This tendency has continued in post-crisis regulation. Accordingly, the 2007–2009 financial crisis has triggered a paradigmatic change in the monetary system, attributable to the political decisions of US authorities

Produkcja cukru i buraków cukrowych na Wegrzech i w Polsce w latach 1995-2014

The work contains a comparison of the changes at the sugar market in Hungary and in Poland in the years 1995-2014. Sugar beet crop area in Hungary has decreased by 87% and in Poland by 48%, while beet root harvest dropped by 25% in Hungary, but remained unchanged in Poland. Sugar beet production was abandoned – either by choice or necessity – by 62% of farmers in Hungary (in the years 2000-2014) and by 87% in Poland (1995-2014). In the 20 year period sugar beet production shrunk in Hungary by 73% and in Poland it grew by 29%. Between 1995 and 2008 11 out of 12 sugar factories in Hungary were closed, while in Poland out of 76 factories, 19 remained operational through that period and 18 remained a year after. Sugar exports in 2013 grew compared to 1995 by 15 times in Hungary, but by 253 times in Poland. Sugar imports in Hungary grew 105 times, in Poland it dropped by 40%. Lifting of sugar production quotas in the EU in 2017 can result in complete abandoning of sugar production in Hungary and its further growth in Poland. Hungary has nevertheless been strengthening their position as the leading producer of isoglucose in the EU.Porównano zmiany, jakie zaszły na rynku cukru na Węgrzech i w Polsce w latach 1995-2014. Powierzchnia uprawy buraków cukrowych na Węgrzech zmniejszyła się o 87%, a w Polsce o 48%, zbiory buraków uległy zmniejszeniu odpowiednio o 25% w przypadku Węgier i nie uległy zmianie dla Polski. Z uprawy buraków cukrowych zrezygnowało lub zostało do tego zmuszonych 62% plantatorów na Węgrzech (w latach 2000-2014), a 87% w Polsce (w latach 1995-2014). W ciągu 20 lat produkcja cukru na Węgrzech zmniejszyła się o 73%, a w Polsce wzrosła o 29%. W latach 1995-2008 zamknięto na Węgrzech 11 z 12 cukrowni, a w Polsce z 76 pozostało czynnych w tym okresie 19, rok później 18 zakładów. W roku 2013 w stosunku do 1995 eksport cukru z Węgier zwiększył się 15-krotnie, a z Polski 253-krotnie. Import zaś wzrósł na Węgrzech 105-krotnie, a w Polsce zmalał o ponad 40%. Zniesienie limitów produkcji cukru w UE w 2017 roku może spowodować całkowite zaprzestanie produkcji cukru na Węgrzech, a jej wzrost w Polsce. Węgry umocnią jednak pozycję największego producenta izoglukozy w UE

Financial–Real-Side Interactions in an Extended Monetary Circuit with Shadow Banking: Loving or Dangerous Hugs?

Monetary circuit (MC) theory is one of the most interesting attempts to formally describe the functioning of a monetary production economy as centered on the concept of the flux–reflux of money. Endogenous money creation by commercial banks allows the circuit to open and firms to implement production processes. Financial markets “passively” close the circuit by intermediating savings via bond and equity issuance. Despite its natural focus on financial-real side links, the monetary circuit literature has paid relatively little attention to “financialization” and the way it has modified real-financial dynamics. In this article, we analyze whether the flux–reflux perspective of the circuit may be fruitfully applied to the description of the linkages between the real economy and finance in a financialized economy. We propose two interconnected circuits, one for the real economy and one for the financial one. In this context, finance can still ensure a consistent closure of the whole system, thus directly allowing the functioning of the real economy. Newly developed inside-finance interactions, however, may indirectly influence real world dynamics, by easing/restricting access to credit/financial markets, and give rise to boom-and-bust cycles. Our aim is twofold: modeling modern financial worlds within an MC framework and understanding how financialization could have changed real-financial interactions