The euro crisis remains unresolved even as financial markets may seem calm for now. The current euro regime is inherently flawed. Recent reforms have failed to turn the dysfunctional euro regime into a viable one. The investigation is informed by the “cartalist” critique of traditional...

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The Federal German Constitutional Court has made it clear that it considers the OMT program to be in violation of the ECB’s mandate. This paper argues that the Court’s decision reflects an endorsement of the efficient-market hypothesis. If financial markets are efficient, interference of any...

Following the crisis of 2007, regulatory authorities either are or should be engaging in a fundamental reconsideration of how they approach financial regulation and supervision. This paper briefly summarizes the present international consensus on regulation as embodied in the Basel framework,...

Mainstream macro-models have assumed away financial frictions, in particular default. The minimum addition in order to introduce financial intermediaries, money and liquidity into such models is the possibility of default. This, in turn, requires that institutions and price formation mechanisms...

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With the OMT program the ECB has de facto taken over the role as a lender of last resort (LoLR) for euro area governments. While this has been welcomed by some, many policymakers and economists, in particular in Germany, have strongly criticized the ECB for taking this step, even though it has...

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The Bank of England’s ‘consultative document’ on Competition and Credit Control was published on May 14th, 1971. It was a landmark occasion, representing a decisive break with the prior system of maintaining direct controls over the, main components of the, UK banking system; the intention...