Eurozone delusions
Wren-Lewis, Simon. I have already had a number of interesting comments on my previous post which illustrate how confused the Eurozone macroeconomic debate has become. The confusion arises because talk of fiscal policy reminds people of Greece, the bailout and all that. That is not what we are talking about here. We are talking about what happens when […]
Why we need a fiscal backstop to the financial system
Schoenmaker, Dirk. In the aftermath of the financial crisis, governments have been reducing their potential exposures to the banking system. This column argues that a fiscal backstop remains necessary for a banking system, contrary to what many policymakers claim. The main reason is that private arrangements may not be sufficient in a severe crisis. Without […]