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Disentangling Sovereign and Banking Crises in Europe – Long-term Reform Agenda and Short-term Needs

Thorsten Beck's picture

Most observers have realized by now that a core problem of the Eurocrisis is the close interconnection between banking and sovereign fragility. The ongoing sovereign debt crisis in Europe continues to put strains on banks’ balance sheets — full of government bonds — while continuous bank fragility increases (contingent and more and more real) government liabilities.  Rather than disentangling the sovereign debt and bank crises, recent policy decisions have tied the two even closer together.  The use of the additional liquidity provided by the European Central Bank (ECB) through longer-term refinancing operations by some banks to stock up on government bonds has also tied the fate of sovereigns and banks closer together. Similarly, the initial plan to use European Financial Stability Facility (EFSF) or European Stability Mechanism (ESM) resources to recapitalize Spanish banks via a loan to the Spanish government bank support agency (FROB) would have exacerbated the Spanish sovereign debt crisis rather than helped to alleviate it, as such a loan would have added another heavy burden to the Spanish debt-to-GDP ratio.  These short-term stresses come on top of doubts about the long-term sustainability of the EU Single Market in banking without a regulatory and supervisory framework that matches the geographic perimeter of banks’ activities.

Friday Roundup: Recent Research on HIV/AIDS

LTD Editors's picture

Washington, DC is buzzing this week with the XIX International AIDS Conference. Heavy-hitters and celebrities like US Secretary of State Hilary Clinton, World Bank President Jim Young Kim, philanthropist Bill Gates and singer Elton John are all participating, and the range of topics being covered include the relationship between AIDS treatment and health systems as well as procurement and corruption issues.

The World Bank, USAID, PEPFAR and The Lancet hosted a debate on July 23, with the motion ‘Continued AIDS investment by donors and governments is a sound investment, even in a resource-constrained environment.’  The sparks flew, with none of the distinguished debaters pulling their punches.

Tapping into the gaming community in tackling global challenges

Junko Narimatsu's picture

On July 22nd, President Kim addressed the International AIDS Conference for the first time as President of the World Bank Group. One of the main themes of the conference this year was the launch of "Towards an HIV Cure”, which made me reflect on the break through achievement made in 2011 by “online gamers” that revealed the structure of an enzyme that could be used to help fight HIV and AIDS.

Can ICTs Advance Human Rights?

Shamiela Mir's picture

Can Information and Communication Technology (ICT) effectively promote the implementation of Human Rights? This was the topic of a thought-provoking presentation organized by the World Bank Institute (WBI) together with the Nordic Trust Fund in OPCS, which explores how a Human Rights lens could help inform Bank projects. The presentation on July 17, 2012 was based on a draft report developed as part of ICT4HR project under ICT4Gov program at WBI. Through various case studies, the draft report looks at both the opportunities and the challenges of effectively using ICT to implement human rights.

Weekly Wire: the Global Forum

Kalliope Kokolis's picture

These are some of the views and reports relevant to our readers that caught our attention this week.

International Center for Journalists
Digital Map to Track Corruption Launches in Colombia

“A new digital mapping tool to track and monitor corruption in Colombia on a national scale, launched July 24th a result of our partnership with the Consejo de Redacción, a country-wide organization of investigative journalists.

The "Monitor de Corrupción" (or "Corruption Monitor") will provide journalists and citizens a platform to submit reports that will expose and map incidents of corruption.

It’s a project I anticipate will contribute to making Colombia a more transparent and stronger society. The idea for this grew out of another similar project by Knight Fellow Jorge Luis Sierra.”  READ MORE 
 

Some lessons from privatizing national airlines

David Lawrence's picture

As a boy growing up in Africa, I always assumed that every country had its own airline. To me, a national airline was just another way a country defined itself, along with its flag, national anthem, and currency. Ghana Airways, which my family often flew (we lived in Kumasi), was a perfect example, with the red, gold and green colors of its national flag painted on every plane. They looked proud and elegant, a perfect symbol of statehood.Does privatization help keep airlines in the sky? (Credit: Matt Hintsa)


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