This paper examines the impact of macroeconomic and financial sector policy announcements in the United States, the United Kingdom, the euro area, and Japan during the recent crisis on interbank credit and liquidity risk premia. Announcements of interest rate cuts, liquidity support, liability...

This paper focuses on euro area policies. The monetary policy stance remains appropriate for now. Fiscal policies are falling well short of consolidation requirements, and the area remains insufficiently prepared for the looming demographic shock. Past fiscal policy failures, notably...

For the time being—and possibly for a considerable time to come—developments and prospects for the euro area are quite favorable. This upbeat outlook is underpinned by buoyant activity indicators and a supportive policy mix. High household and business confidence, rising capacity utilization...

The euro area (EA) plays a major role in the global economy. Market perceptions of events in the EA program countries illustrate the possibility of large spillovers from the area in times of stress. The prospect of large spillovers underscores the urgent need for actions to contain, and...

The 2012 Article IV Consultation report on euro area policies highlights that investors are withholding funding from member states most in need, moving capital “north” and abroad to perceived safer assets. Executive Directors have noted that the euro area continues to face a number of...