De-Risking the Future of Europe: reforming the macrofinancial architecture

Date: Wednesday 11th September 2019 
Time: 09:00 to 18:00  
Venue: OLD.3.21, Old Building, LSE

Hosted by Foundation for European Progressive Studies, Roskilde University, University of the West of England and Financial Markets Group, London School of Economics and Political Science

The architecture of economic and financial governance in the European Union is changing at an unprecedented pace. Member States have put in place crucial pillars of the Banking Union and the Capital Markets Union (CMU). The single market in capital, it is hoped, will offset the growth-effects of the on-going deleveraging of the European banking sector, allowing firms, in particular small and medium enterprises, to raise market-funding.

But progress on both projects has slowed down. Brexit questions aside, the stumbling block has been the question of the bank-sovereign nexus. Some Member States demand limits on banks’ sovereign exposures and/or for non-zero risk weights on sovereign debt as condition for the European common deposit insurance scheme. Other countries are resisting the push. The worry is that such changes would limit the set of counter-cyclical fiscal tools that Member States can deploy during recessions and sharper volatility in sovereign debt markets.

For some European institutions, the most urgent reform priority is to address the absence of a single sovereign that can issue safe debt, a role now played by Germany. The European Commission, drawing on plans outlined by the European Systemic Risk Board, has put forward proposals for Sovereign Bond-Backed Securities, to be approved by the European Parliament by February 2019. The SBBS stated intention is to engineer a shift in the ‘tectonic’ plates of Euroarea sovereign bond markets, reducing the asymmetries between Member States without risk-sharing.

The conference will be the occasion for policy-makers and academic experts to reflect and exchange on the pros and cons of different models to design further financial integration within the Euro area and the whole of Europe.

The keynote address will be given by Vítor Manuel Ribeiro Constâncio, former Vice-President of the European Central Bank.

Confirmed speakers:
Inaki Aldasoro, Bank for International Settlements
Tobias Arbogast, Max Planck Institute for the Study of Societies
Benjamin Braun, Max Planck Institute for the Study of Societies
Aitor Erce, European Stability Mechanism
Stephany Griffith-Jones, Columbia University
Jean Grossdidier, Sciences Po
Marina Hubner, Max Planck Institute for the Study of Societies
Natalya Naqvi, LSE
Waltraud Schelke, Professor, European Institute, LSE
Matthias Thiemann, Sciences Po
Nicolas Véron, Bruegel & Peterson Institute for International Economics

The programme will be available shortly.

Register here