Complementing Europe's bank-based system with deeper capital markets and more cross-border financial integration promises benefits, but despite long-running debate and policy action, financial system change remains slow. Fintech has the potential to change financial intermediation structures...

Under the current European Union frameworks for dealing with banking problems, resolution of banks is seen as an exception to be activated only if liquidation under national insolvency proceedings would not be warranted. This is most notably the case when the bank provides critical functions to...

This Policy Contribution, based on a note written for the Bundestag EU Committee, explores the possible consequences of a no-deal Brexit for the European Union and assesses preparations on the EU side. It also provides guidance on the optimal strategy for the EU, depending on the choices made by...

The euro became an international currency when it was created two decades ago. However, the euro's internationalisation peaked as early as 2005 and it was never comparable to the US dollar. Its international status declined with the euro crisis. Faced with a US administration willing to use its...

A monetary union without fiscal union is generally considered to be incomplete. We consider three steps for increasing the centralisation of fiscal functions, and discuss the prerequisites for moving forward at each one. Above all, fiscal integration is a matter of trust, which is currently at a...

Quantitative easing (QE) affects banks’ profitability in three main ways. First, as QE drives up bond prices, banks holding such bonds see their balance sheets strengthened. Second, QE reduces long-term yields and thereby reduces term spreads. With this, the lending-deposit ratio spread falls,...

Europeans like to believe the European Union has the collective economic size and capacity to determine its own economic destiny. But the behaviour of others global powers is increasingly calling this ability into question. China and the United States, especially, do not separate economic...

The European Union can look ahead at the next five years from a good economic position. Employment is comparatively high, the recovery has been uninterrupted for several years and income inequality remains less pronounced than elsewhere in the world. But the EU faces nevertheless formidable...

The global trading system, a source of prosperity, is under attack on various fronts. The causes run deep and require a strategic response from the European Union and from the main trading nations. The future of the system hinges on the answer to three questions, and the scenarios associated...

We study whether and to what extent EU countries implement recommendations on macroeconomic imbalances given by the EU in the so-called European Semester. We assess how recommendations have evolved since 2013, based on a new database. We also study how EU recommendations on addressing...