The framework for fiscal policy coordination in EMU has been in effect for three years. The experience gained shows that the rule-based approach provides in principle a feasible solution for policy coordination among a large number of heterogeneous countries whose joint interest is to safeguard...

The paper considers a model in which limited liability causes an asset substitution problem for banks. The problem can at times become so severe that the current regulatory framework – based on a combination of effectively full deposit insurance, minimum capital requirements and prudential...

The macroeconomic reasons for the recent banking crises in the Nordic countries are analysed using an econometric model estimated with panel data from the 1980s and 1990s. Two alternative dependent variables are used: the ratio of banks’ loan losses to lending and enterprise bankruptcies per...

This paper presents a model of the optimal bidding behaviour of a single bank in the context of fixed rate liquidity tenders. Banks’ bidding is shown to depend crucially on the central bank’s liquidity policy as regards tender allotments. The paper also analyses ECB liquidity policy in terms...

Securities settlement is an area, where nobody seems to be content with the current international processing systems, but neither has a proposal for improvement emerged that has attracted common support. This paper describes a possible solution based on an international, harmonised and...