• Linkedin
  • Twitter

In the euro area, discipline is of the essence, but risk-sharing is no less important

Author(s): Daniel Daianu

Date published: Apr 2018

SUERF Policy Note, Issue No 30
By Daniel Daianu, National Bank of Romania

JEL-codes:  E44, E62, E63, E66, F45.
Keywords: crisis, euro area, banking union, rules, risk-sharing, reforms.

A more robust euro area demands a reconciliation between rules and discipline on one hand, and risk-reduction and risk sharing  (private and public) on the other hand. Risk-sharing is to be designed in such a way as to reduce moral hazard while, simultaneously, considering asymmetric shocks, different strengths of national budgets and of member states’ economies, all of which do vary over time. An adequate calibration between rules and risk-sharing, between private and public risk-sharing, is an open question. Only private risk-sharing schemes would not make the euro area more robust since financial markets are too fickle and  produce systemic risks recurrently.

Read Full Text

SUERF Policy Note, Issue No 30SUERF Policy Note, Issue No 30

0Web version: In the euro area, discipline is of the essence, but risk-sharing is no less important

© SUERF - The European Money and Finance Forum 2010-2018 .:. Société Universitaire Européenne de Recherches Financières

Privacy Policy .:. Legal notice

Design by draganmarkovic.net