At present, the market is severely mispricing Greece’s sovereign risk relative to the country’s fundamentals. As a result of the mispricing, financial intermediation in Greece has become dysfunctional and the privatisation of state-owned assets has stalled. This mispricing is partially due...

The pricing of sovereign credit risk is a necessary component of the financial architecture of the European Monetary Union. However, unnecessarily high and volatile risk premia on government bonds are currently preventing effective financial intermediation within the euro area, thereby...

This article analyses the background of the Cypriot banking crisis and discusses the parameters of the multilateral assistance programme that was agreed to in March 2013. It argues that the existing deposit insurance scheme in Cyprus has been circumvented in order to force large bank creditors...

Latin American domestic bond markets have developed rapidly in the past few years. Yield curves have been extended, issuance has shifted towards long-term, fixed-rate bonds, and non-resident participation has increased. Several factors have contributed to this process: Pension reform, increased...

This study offers an in-depth economic analysis of the two main proposals for the creation of a European unemployment insurance scheme. One proposes the creation of a harmonised European unemployment benefit scheme that would apply automatically to every eligible unemployed person. The...

One frequently hears the question posed in the title to this report, but there is little systematic analytical literature on the issue. Fragmented evidence or anecdotes dominate debates among EU regulatory decision-makers and in European business, insofar as there is a genuine debate at all....

ESMA, the European watchdog of securities markets, has announced its intention to take a closer look at so-called ‘closet trackers’, with a view to identify whether there is a potential need for a coordinated pan-European policy response to these particular funds, which are supposedly...

This CEPS Special Report investigates ways to enhance the legitimacy of economic governance in the Economic and Monetary Union (EMU) without introducing Treaty changes. It suggests changes in the governance framework at both the institutional and economic level. Input-oriented legitimacy can be...

Deviations of policy interest rates from the levels implied by the Taylor rule have been persistent before the financial crisis and increased especially after the turn of the century. Compared to the Taylor benchmark, policy rates were often too low. This paper provides evidence that both...