http://www.VoxEU.org Recent Anne Sibert articles on VoxEU.org en http://www.VoxEU.org/index.php?q=node/9160 Anne Sibert, 2 April 2013

Depositors in Eurozone banks are facing a steep learning curve on just exactly what deposit insurance means. This column points out that the precedents set in Cyprus and Iceland show that deposit insurance is only a legal commitment for small bank failures. In systemic crises, these are more political than legal commitments, so the solvency of the insuring government matters. A Eurozone-wide deposit-insurance scheme would change this. This reposted column corrects an error, due to the editor, that was in the first posting.

Full Article: Deposit insurance after Iceland and Cyprus]]> Tue, 02 Apr 2013 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/9160 http://www.VoxEU.org/index.php?q=node/6980 Anne Sibert, 15 September 2011

The European Central Bank was once known for its focus on price stability. Since the global economic crisis, however, its role has extended to saving banks and sovereign countries. This column argues that such a move has badly harmed the institution’s legitimacy – something that will damage both its policy effectiveness and confidence in the governing bodies of the EU as a whole.

Full Article: The damaged ECB legitimacy]]> Thu, 15 Sep 2011 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/6980 http://www.VoxEU.org/index.php?q=node/5059 Anne Sibert, 18 May 2010

Investigation of Iceland's meltdown has revealed dodgy behaviours ranging from neglect to criminal fraud. This column describes how Icelandic banks issued “love letters” to each other – swapping their debt securities and using the other bank’s debt as collateral. This ruse ensnared not just the Icelandic Central Bank, but also the ECB – a fact that has only recently come to light. The ECB's lack of transparency on this is a serious problem.

Full Article: Love letters from Iceland: Accountability of the Eurosystem]]> Tue, 18 May 2010 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/5059 http://www.VoxEU.org/index.php?q=node/4611 Anne Sibert, 13 February 2010

Who should pay for the money lost by UK and Dutch citizens investing in Icesave accounts? This column presents the dispute's background and argues that the debt burden of Icesave is likely to be closer to 15% of GDP than the 50% often reported. It concludes that Iceland is not too small to repay.

Full Article: The Icesave dispute]]> Sat, 13 Feb 2010 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/4611 http://www.VoxEU.org/index.php?q=node/4495 Anne Sibert, 16 January 2010

Economists largely neglected systemic risk in the financial sector. This column discusses how governments should gather data about systemic risk and assess its implications. It says the new European Systemic Risk Board is far from the ideal – it is too big, too homogeneous, and lacks independence.

Full Article: Designing a systemic risk warning system]]> Sat, 16 Jan 2010 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/4495 http://www.VoxEU.org/index.php?q=node/3857 Anne Sibert, 10 August 2009

As Greenland moves away from Denmark and acquires more autonomy, this column asks whether it might be too small. In assessing the relationship between country size and economic performance, it warns that small states have more volatile GDP, more volatile consumption, and more incompetent civil servants.

Full Article: Could Greenland be the new Iceland?]]> Mon, 10 Aug 2009 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/3857 http://www.VoxEU.org/index.php?q=node/3572 Anne Sibert, 18 May 2009

Greedy bankers are getting most of the blame for the current financial crisis. This column explains bankers did behave badly for mainly three reasons. They committed cognitive errors involving biases towards their own prior beliefs; too many male bankers high on testosterone took too much risk, and a flawed compensation structure rewarded perceived short-term competency rather than long-run results.

Full Article: Why did the bankers behave so badly?]]> Mon, 18 May 2009 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/3572 http://www.VoxEU.org/index.php?q=node/2498 Willem Buiter, Anne Sibert, 30 October 2008

In the first half of 2008, Buiter and Sibert were invited to study Iceland’s financial problems. They identified the “vulnerable quartet” of (1) a small country with (2) a large banking sector, (3) its own currency and (4) limited fiscal capacity – a quartet that meant Iceland’s banking model was not viable. How right they were. This column summarises the report, which is now available as CEPR Policy Insight No. 26 with an October 2008 update.

Full Article: Iceland’s banking collapse: Predicable end and lessons for other vulnerable nations]]> Thu, 30 Oct 2008 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/2498 http://www.VoxEU.org/index.php?q=node/2504 Willem Buiter, Anne Sibert, 29 October 2008

According to the authors of CEPR Policy Insight No. 26, Iceland has two options: either join the EU and EMU and keep its international banking activities domiciled in Iceland, or retain its own currency and move its foreign currency banking activities to the euro area

Full Article: The Icelandic banking crisis and what to do about it ]]> Wed, 29 Oct 2008 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/2504 http://www.VoxEU.org/index.php?q=node/953 Willem Buiter, Anne Sibert, 26 February 2008

Barack Obama, the likely Democratic presidential candidate, has proposed tax breaks for US corporations that invest at home rather than abroad. This column argues that his proposal is protectionist, reactionary, and economically unsound.

Full Article: The dangerous protectionism of Barack Obama]]> Tue, 26 Feb 2008 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/953 http://www.VoxEU.org/index.php?q=node/481 Willem Buiter, Anne Sibert, 18 August 2007

The Fed’s 17-8-07 move was a missed opportunity. It should have effectively created a market by expanding the set of eligible collateral, charging an appropriate "haircut" or penalty interest rate, and expanding the set of eligible borrowers at the discount window to include any financial entity that is willing to accept appropriate prudential supervision and regulation.

Full Article: Subprime crisis unfolds: What the Fed should have done instead]]> Sat, 18 Aug 2007 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/481 http://www.VoxEU.org/index.php?q=node/459 Willem Buiter, Anne Sibert, 13 August 2007

Last week's actions by the ECB, the Fed and the Bank of Japan were not particularly helpful – a classic example of trying to manage a credit crisis or liquidity squeeze using the tools suited to monetary policy-making in orderly markets. Monetary policy is easy; preventing or overcoming a financial crisis is hard; managing the exit from a credit squeeze without laying the foundations for the next credit and liquidity explosion is harder still. Central bankers should earn their keep by acting as market makers of last resort.

Full Article: Subprime 'crisis': What Central Bankers should do and why]]> Mon, 13 Aug 2007 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/459 http://www.VoxEU.org/index.php?q=node/207 Willem Buiter, Anne Sibert, 3 May 2006

The Maastricht Treaty’s Eurozone entry criteria were designed for slow-growing West European nations. They make no economic sense for the new EU members. These nations opted for stable exchange rates, so their inflation rates rose with energy prices and rapid productivity growth. Neither the ECB nor the Bank of England would try to control inflation and exchange rates simultaneously. Why should Eurozone aspirants be forced to do so?

Full Article: The euro’s inflation test]]> Wed, 03 May 2006 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/207