International Law

ECB prepares emergency liquidity facility for troubeled euro zone banks

Posted on March 26, 2011
The European Central Bank is putting together a lending facility for troubeled euro zone banks. Reuters quotes a source saying that "this will replace the ELA (Emergency Liquidity Assistance) that is currently being provided by the Irish central bank...

Macro-Financial Stability in the New Normal (IMF Conference)

Posted on March 25, 2011
In the aftermath of the global financial crisis, monetary and regulatory policies are being reassessed to reduce systemic vulnerabilities and costly financial crises. The global financial crisis has highlighted weakness in macroeconomic and regulatory policies and market failures that contributed to a buildup of systemic risks...

US Supreme Court Orders More Bailout Transparency

Posted on March 23, 2011
On Monday the US Supreme Court let stand a lower-court ruling compelling the Fed to reveal the names of banks that borrowed money at the so-called discount window during the financial crisis. This court order in Bloomberg LP vs Federal Reserve Board of Governors requires additional information including names of...

MonetaryLaw.Net

Posted on March 21, 2011
Our new address is monetarylaw.net. This gives expression to the wider range of topics covered compared to the original focus on the EU's monetary union. The 'net' domain also underlines that we're a network--soon we'll start publishing posts by guest bloggers as well...

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What Role for the New Financial Stability Board?

Posted on March 19, 2011
"Under any scenario, then, it is clear that the FSB is likely to have an important future in international regulatory politics. If the political support behind strengthening the international standards regime holds up, the FSB will certainly have its hands full, including with the tasks of addressing the challenges outlined...

When Money Dies

Posted on March 14, 2011
"...if you wish to destroy a nation you must corrupt its currency. Thus must sound money be the first bastion of a society's defence." That is how Adam Fergusson, historian, journalist and former European Parliament member, ends the prologue to his book 'When Money Dies: The Nightmare of the Weimar...

Spanish Town 'Reintroduces' Peseta

Posted on March 12, 2011
A small town in northern Spain has decided to reintroduce the old Spanish currency - the peseta - alongside the euro to give the local economy a lift. Shopkeepers in Mugardos want anyone with forgotten pesetas to come and spend it. The BBC reports that people are travelling to Mugardos...

The Global Economic Crisis: Central Banking at the Centre of Power

Posted on March 09, 2011
The following is an excerpt of a chapter by Andrew Gavin Marshall from the new book by Global Research Publishers, "The Global Economic Crisis: The Great Depression of the XXI Century." Introduction To understand the historical context of the current crisis, it is pivotal to address the nature of the...

Did central banks do enough to properly tackle the Great Recession?

Posted on February 19, 2011
That's bascially the argument between The Economist bloggers Free Exhange and Buttonwood--read latest post. The question to central bank lawyers would be "does your central bank have all necessary legal authority?" Well, does it?

A more complicated game for central banks

Posted on February 18, 2011
"The West?s financial crisis has shaken public confidence in its leading central banks. Yet it has also led to an expansion of their duties and powers?. ...In a sense, central banks have returned to their roots. The first central banks were created to handle the sovereign?s financial affairs and issue...

The role of central banks after the crisis

Posted on January 29, 2011
"The current crisis will have far-reaching consequences for the role and responsibilities of central banks. They will need to pay greater and more symmetric attention to financial considerations in framing their monetary policy. They will also need to play an important role in any macroprudential policy framework that is set...

FCIC: "Financial crisis could have been prevented"

Posted on January 28, 2011
The US Financial Crisis Inquiry Commission (FCIC) has concluded that the crisis of 2007-2009 was avoidable?the result of human actions, inactions, and misjudgments. Warnings were ignored. ?The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done...

ELA: An Emperor without Clothes?

Posted on January 25, 2011
Emergency liquidity assistance (ELA) by the Irish central bank (CBI) is the subject of a recent Citigroup Global Markets' note authored by Willem Buiter, Jürgen Michels, and Ebrahim Rahbari. They comment, from a legal and economic perspective, on CBI's ELA to Irish banks against the backdrop of the euro area's...

Happy New Year ...welcoming Estonia to the euro area

Posted on January 01, 2011
All the best to all of you. In particular our friends in Estonia who joined the euro area on January 1, 2011.

Netherlands Plans to Make Call for Bank Run a Criminal Offense

Posted on December 24, 2010
The Dutch government intends to make calls for bank runs a criminal offense. At the start of 2011 the Dutch Ministry of Justice plans to send a draft bill amending the Dutch Criminal Code, it said in a statement today. Under the draft legislation, inciting customers to withdraw their money...

Basel III: A global regulatory framework for more resilient banks and banking systems

Posted on December 23, 2010
Full text of "Basel III: A global regulatory framework for more resilient banks and banking systems", December 2010 From BIS.org ... The Basel Committee has issued the Basel III rules text, which presents the details of global regulatory standards on bank capital adequacy and liquidity agreed by the Governors and...

Central banks: between internationalisation and domestic political control

Posted on November 28, 2010
The BIS has published a paper on 'Central banks: between internationalisation and domestic political control' authored by Mr. Harold James. (Working Paper No. 327) This paper includes a discussion of central bank independence--or 'autonomy' as I would like to call it...

The Changing Role Of Central Banks

Posted on November 27, 2010
The BIS has published a paper on 'The changing role of central banks' authored by Mr. Charles Goodhart. (Working Paper No. 326) This paper includes a historic introduction and a discussion of the future role of central banks. Abstract: Although Central Banks have pursued the same objectives throughout their existence,...

What Is A Useful Central bank?

Posted on November 26, 2010
On November 18, 2010 the Norwegian central bank (Norges Bank) held a conference discussing 'What is a useful central bank?' with an international group of central bankers and academicians. The conference was structured around four topics: historical perspectives on central banking (long term perspective and the interwar years); perspectives from...

Small But Growing Support For Giving US Fed Single Objective

Posted on November 25, 2010
"...Wisconsin Congressman [Paul Ryan] has since 1999 proposed legislation that would let the Fed focus monetary policy solely on the goal of stable prices. This week he's been joined by fellow Republicans Mike Pence of Indiana and Tom Price of Georgia, while Senator Bob Corker of Tennessee told us he...

The Fed's dual mission impossible

Posted on November 19, 2010
In 1977, Congress gave the Federal Reserve a "dual mandate." Although the central bank is a creature of Congress, it is, in trying to fulfill this mandate, becoming a fourth branch of government. via www.washingtonpost.com

Codes, Principles, and Good Practices for Financial Sector Oversight

Posted on November 19, 2010
Standard-setting international bodies have published codes, principles, and good practices for financial sector oversight on a host op topic. This blog attempts to give an overview of this valuable guidance. Financial Regulation and Supervision Code of Good Practices on Transparency in Monetary and Financial Policies (September 1999) Core Principles for...

European Banks' Sovereign Debt Exposures

Posted on November 15, 2010
The Financial Times features an interactive map of Europe designed to explore European banks? exposure to struggling economies. Click on any country to see how banks are exposed to the sovereign debt of the selected country. It is also possible to select a particular bank and see how this bank...

Irish Central Bank Governor: ?total loan losses about 55 per cent of this year?s GDP?

Posted on November 13, 2010
?I?m not sure that it is widely recognized just how big the actual and prospective loan-losses taken account of in the recapitalization of retail banks in Ireland has been. ? the total loan losses come to no less than ?85 billion, or about 55 per cent of this year?s GDP...

Market structure developments in the clearing industry: implications for financial stability

Posted on November 11, 2010
From the BIS website, regarding a new CPSS publication. "During the last decade, the central clearing industry has experienced a large number of changes, which have profoundly affected both its role in the broader financial infrastructure and its own market structure...

Central Banks and Their Role in Macroregulation and Financial Stability: Perspectives From Chile and Bolivia

Posted on November 04, 2010
Central banks? contribution to financial stability ? the experience of Chile Speech by Mr Enrique Marshall, Board Member of the Central Bank of Chile, at the Central Bank of Bolivia's First Financial Workshop "Macroregulation and Financial Stability", La Paz, 29 September 2010...

International Monetary and Financial Law: The Global Crisis

Posted on October 31, 2010
This new book edited by Mario Giovanoli and Diego Devos (respectively, former and current General Counsel of the Bank for International Settlements) is organized around four main topics: The Reform of the International Financial Architecture Financial Regulation and Supervision: the Crisis Test Financial Crisis Resolution and Litigation Issues Money, Central...

International Financial Institutions in a Post-Crisis World: Legal Challenges and Opportunities

Posted on October 28, 2010
The 2010 Law, Justice and Development Week , which will be held between November 8 and 12, 2010 in Washington, DC, will bring together senior officials from various international financial institutions, global finance and development practitioners, government officials, lawyers and judges, scholars and academics, and representatives from NGOs and civil...

Economic Governance in the European Union

Posted on October 01, 2010
This week the EU Commission proposed a comprehensive package of legislation regarding fiscal discipline. From the Commission website: "The legislative package reinforces Member States? compliance with the Stability and Growth Pact (SGP) by establishing the new concept of prudent fiscal policy-making (PFPM) and should ensure convergence by Member States towards...

Iceland's former PM to face criminal charges over banking crisis

Posted on September 29, 2010
The Basel Core Principles for Effective Banking Supervision prescribe effective legal protection for banking supervisors. There is no similar 'best practice' for politicians; Iceland's former Prime Minister Geir Haarde is finding out personally. This week, Icelandic lawmakers passed a resolution by 33 votes to 30 to take Mr Haarde to...

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