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Frühjahr/Sommer 2009Spring/Summer 2009
5/25/2019 : 11:12 pm : +0200

The crisis in CEE

After the crisis, the country can only grow, if it overcomes its dependency on commodities.

(Die Presse, German)


Financial distress: Sofia expected to ask for IMF-support

Die Presse (in German)

The reigning socialist party of Bulgaria is still denying the extent of current economic downturn. But a political shift seems likely when elections will take place soon. Therefore Bulgaria is expected to ask for IMF-funds shortly.


Lettland - The New Argentina?


Latvia has been hard hit by the global crisis and faces an unsustainable currency peg. Should the country float its currency, adopt the euro, or try a contained devaluation? This column assesses the options and says that the latter is most realistic, in that it will address the concerns of the EU, IMF, and Latvia.


In defence of foreign banks


In recent months, foreign-owned banks have been accused of abandoning the emerging markets that have contributed so much to their profitability over the last decade. This column analyses a large bank-level dataset of foreign bank subsidiaries across the world, to compare lending by foreign bank subsidiaries with lending by domestic banks. Importantly, it finds that as a result of parental support, foreign bank subsidiaries do not typically rein in their lending during a financial crisis.

Crisis Management in Central,East and Southeast Europe. What is to be done? Lecture given by Vladimir Gligorov (wiiw) on May 25th 2009.


Like phoenix from ashes

Die Presse (in German)

The comeback of the International Monetary Fund (IMF) as the central monitoring, coordination and funding institution of the global economy in times of the crisis.

New rules for global markets

European Union finance ministers agreed yesterday (7 July) to tighten bank loans during periods of economic growth in order to boost liquidity and make funds available for when recession hits. The agreement came as national regulators proposed to build a bank liquidity buffer to guarantee a "survival period of at least one month". (Euractiv)


Policy Responses to the Crisis: Implications for the WTO and International Cooperation


For most nations in the world, this is a trade crisis. Leaving China and India aside, income of developing nations is expected to drop 1.6% this year, even though these nations had nothing to do with subprime assets or the financial shenanigans that triggered the crisis. A new CEPR-World Bank e-book reports that protectionism is not yet a problem, but argues that the "fateful allure of protectionism" is a threat. To counter the threat, four concrete steps should be taken to reinforce the global trade and financial architecture.


International Monetary Fund: "Banks need new equity"

Die Presse (in German)

IMF official Paul Hilbers sees Austrian bank's necessity to acquire new equity to prepare for an increasing number of loan defaults. Although the owners' capital is to be accessed first, the IMF encourages Austrian government to provide further liquidity to domestic banks.

Would reducing corruption increase trade? While corrupt customs officials extorting bribes from exporters may impede trade, those who take bribes to circumvent formal trade barriers may help it. This column estimates that when tariffs exceed 25%, the pro-trade effects of corruption may dominate.


Shifting wealth: Is the US dollar Empire falling?


If history is any guide, the Chinese renminbi will soon be due to overtake the US dollar, just as the dollar replaced the pound sterling last century. But will the renminbi be ready for reserve currency status? This column discusses the issues at hand and explains why some experts would prefer the IMF’s Special Drawing Rights as the next global reserve currency.


Boosting the availability of trade finance in the current crisis


This policy insight provides background analysis for a substantial G20 package.


The regulatory rumble begins

The Economist

In America and Europe, new rules are running into stiff resistance—from regulators themselves.


The new global balance: Financial de-globalisation, savings drain, and the US dollar


In a new financial landscape in which leverage is limited by worldwide regulation and the gradual digestion of toxic assets will weigh on bank’s balance sheets, the US will face tougher terms to finance its external imbalance. Perfectly at odds with the global imbalance premonitions of the early 2000s, the dollar’s weakness will likely be the best gauge of the turnaround of the global crisis.


Will special drawing rights supplant the dollar?


China recently called for SDRs to replace the dollar as the international reserve currency and diminish the US economic supremacy.