25 November 2021
The ECB Cannot Ignore its Secondary Mandate
The EU Treaties oblige the European Central Bank to support the broader economic policies in the EU. Yet, the ECB has long ignored this part of its mandate. In the recently concluded monetary policy strategy review it only gets a brief mention. As we argue in a new report, this neglect of the ECB’s secondary mandate is illegal and should end as soon as possible. Continue reading >>
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16 November 2020
Greening Banks in the Face of Uncertainty
To this day, banks continue to plough money into carbon-intensive sectors of the economy while making inadequate provisions for potential losses. The European Central Bank’s 2020 draft Guide on climate-related and environmental risks is a major step in supervisory efforts to address this problem, which so far has escaped critical scrutiny. It sets out how the ECB will use its supervisory powers to get banks to properly monitor, disclose and price risk. As we argue, its current approach is unlikely to work because it asks banks to quantify risks that often resist simple quantification. Instead, the ECB should provide banks with more targeted guidance. That will make banking supervision more political than it is today. Continue reading >>
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29 April 2020
With Exclusive Competence Comes Great Responsibility
The European Commission supports the Covid-19 crisis-fighting measures through generous exemptions to its EU state aid rules. Although in principle justified, this policy also gives companies in rich member states an immense advantage over their competitors in poorer member states. Until more effective burden-sharing on the EU level is forthcoming, the onus is on European Commissioner for Competition Margrethe Vestager to ensure a fair distribution of state aid between the member states. Continue reading >>17 June 2019