Luis Garicano

In Spain, the diabolic loop is alive and well

Since the start of the crisis, the link between banks and their sovereigns has only been strengthening, with dire consequences for the periphery’s economies. To focus on Spain, in October 2008, the Spanish financial system had 78bn of Spanish government bonds. The loop is also strengthening in the other direction. The hidden losses in the banking …

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Towards a European Reconstruction Fund

The idea that Europe’s response to the economic crisis should be based on the issuance of common perpetual bonds has been slowly gaining ground, but proposals that entail substantial increases to member states’ debt risk hampering growth for decades to come. This column argues that the time has come for genuine European spending financed through …

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Two proposals to resurrect the Banking Union: the Safe Portfolio Approach and SRB+

Paper prepared for ECB Conference on “Fiscal Policy and EMU Governance”, Frankfurt, 19 December 2019 Luis GaricanoMember of the European Parliament Professor of Economics and Strategy, IE Business School (on leave) AbstractNearly eight years after its inception, the European Banking Union is crumbling. None of its two stated objectives—breaking future contagion between banks and sovereigns, …

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