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See detailRegional Development Banks and the promotion of Public-Private Partnerships: the EIB as a case study
Howarth, David UL; Liebe, Moritz

in Clifton, Judith; Diaz Fuentes, Daniel; Howarth, David (Eds.) Regional Banks in the World Economy (2021)

Most Regional Development Banks in the world have engaged in the increased promotion and use of Public Private Partnerships (PPPs). To explain this rapid and ubiquitous spread of Public Private ... [more ▼]

Most Regional Development Banks in the world have engaged in the increased promotion and use of Public Private Partnerships (PPPs). To explain this rapid and ubiquitous spread of Public Private Partnership promotion and use, this chapter argues that Regional Development Banks can be seen to have acted as agents engaged in slippage. Most—if not all—of their shareholding national governments and loan recipient countries had limited or no prior experience with and knowledge of PPP financing. This activism on the part of Regional Development Banks can also be seen in both Multilateral Development Bank and National Development Bank promotion of PPPs and reinforces wider claims in the literature. More generally, Gavin and Rodrik (1995) argue that International Financial Institutions (IFIs) bolster their long-acquired skills in technical and information expertise in order to remain relevant—a claim that this chapter explores with regard to PPPs in particular. The promotion of PPPs should also be seen in terms of Regional Development Banks operating as agents to move beyond the correction of market failure towards the creation and/or shaping of markets through a particular financing mechanism and with specific market actors (Mazzucato and Penna 2016: 305). [less ▲]

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See detailRegional Development Banks in the World Economy
Howarth, David UL; Clifton, Judith; Diaz Fuentes, Daniel

Book published by Oxford University Press (2021)

Regional development banks (RDB) have become increasingly important in the world economy, but have also been relatively under-researched to date. This timely volume addresses this lack of attention by ... [more ▼]

Regional development banks (RDB) have become increasingly important in the world economy, but have also been relatively under-researched to date. This timely volume addresses this lack of attention by providing a comprehensive, comparative, and empirically informed analysis of their origins, evolution, and contemporary role in the world economy through to the second decade of the twenty-first century. In Regional Development Banks in the World Economy, the editors provide an analytical framework that includes a revised categorisation of RDB by geographic operation and function. Part one offers detailed analyses of the origins, evolution, and contemporary role of the major RDB, including the Inter-American Development Bank, the African Development Bank, the Asian Development Bank, the European Investment Bank, the Central American Bank, the Andean Development Corporation, the European Bank for Reconstruction and Development, and the Asian Infrastructure Investment Bank. Part two offers comparative analyses of key topics on RDB, examining their initial design and their changing business models, their shifting role in promoting policies supported by the United States as hegemon and the private sector. The volume ends with a critical reflection on the role played by RDB to date and a strong defence of the need for these banks in an increasingly complex world economy. [less ▲]

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See detailNein to ‘Transfer Union’: the German brake on the construction of a European Union fiscal capacity
Howarth, David UL; Schild, Joachim

in Journal of European Integration (2021), 43(2), 207-224

This paper argues that, on the development of European Union (EU)/Eurozone fiscal capacity German governments have consistently engaged in foot-dragging. Few German state elites have ever supported ... [more ▼]

This paper argues that, on the development of European Union (EU)/Eurozone fiscal capacity German governments have consistently engaged in foot-dragging. Few German state elites have ever supported European fiscal capacity building beyond the EC budget. Following the outbreak of the Eurozone sovereign debt crisis, German governments agreed to the creation of financial support mechanisms only with reluctance. We see a case of continuity in German policy preferences driven by consistent ordoliberal and, specifically, moral hazard concerns. The important longterm change that we can observe relates to the growing importance for successive governments of avoiding audience costs driven by sceptical public opinion and the rise of a challenger party in German politics. German government support for a massive EU fiscal response to the economic crisis triggered by the COVID-19 pandemic demonstrates an exceptional policy position in favour of temporary financial mechanisms involving no fiscal transfers among member state governments. [less ▲]

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See detailComment expliquer les reforms du secteur financier en Europe : acteurs, idées ou institutions
Howarth, David UL

in Saurugger, Sabine; Hassenteufel, Patrick (Eds.) Les Politiques Publiques dans la Crise (2021)

This chapter presents an analysis of the public policies carried out in Europe to regulate the financial sector over the pas fifteen years, focusing notably on the role of financial sector and government ... [more ▼]

This chapter presents an analysis of the public policies carried out in Europe to regulate the financial sector over the pas fifteen years, focusing notably on the role of financial sector and government actors, while considering the role of ideas and institutional frameworks. The concern for financial sector stabilization and reinforced supervision in the aftermath of the crisis has led to the adoption of various European-level and national regulations. Competitive pressures within a highly internationalized sector, as well as the many possibilities for regulatory arbitrage, have justified the use of international and, at least, EU-level financial sector control mechanisms. This chapter demonstrates that the crises from which the EU suffered from 2007 led to a rupture in policies and power relations between public and private actors. The strengthening of supervision and supranational supervision is the direct consequence, and resulted in the creation of the three European authorities (EBA, EIOPA and ESMA), and above all the creation of the Single Supervisory Mechanism (SSM) and the transfer of supervisory powers over the euro zone's largest banks to the European Central Bank. The possibility of inadequate national supervision — a situation in which national public authorities ignore or accept the problems of national banks for various reasons — has thus been reduced. The effect of Basel III (international capital guidelines) is also felt on the activities and organization of large banks, encouraged to limit their high-risk activities. Most of the major European banks have reduced, or are in the process of reducing, their balance sheets. Yet to speak of a paradigm shift in the approach of the governments of major European countries, or even the European Commission, to financial regulation is premature. The constraints imposed on the financial sector, apart from the banks, have only partially increased. As a result of the Banking Union, the overall influence of banks has probably diminished at the national level, at least with regard to banking supervision. However, the ongoing weakness of bank regulation in many areas — for example, the weakness or absence of bank structural reform in all European countries with the exception of the United Kingdom — demonstrates ongoing bank influence. Moreover, other financial sector actors continue to be under-regulated and, arguably, insufficiently supervised. [less ▲]

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See detailDelivering value for money? The problematic accountability of the European Stability Mechanism
Howarth, David UL; Spendzharova, Aneta

in Stevenson, Paul; Sánchez-Barrueco, María-Luisa; Aden, Hartmut (Eds.) Financial Accountability in the European Union (2021)

This chapter undertakes a critical assessment of the accountability of one recent institutional addition to the Euro area governance system – the European Stability Mechanism (ESM). Regarding Euro area ... [more ▼]

This chapter undertakes a critical assessment of the accountability of one recent institutional addition to the Euro area governance system – the European Stability Mechanism (ESM). Regarding Euro area governance in general, Dawson (2015: 976) warns that many new structures designed in response to the Euro area crisis ‘depart from the mechanisms of legal and political accountability present in previous forms of EU decision-making without substituting new models of accountability in their place’. By examining in greater detail the financial accountability mechanisms applicable to an important new Euro area body, we identify accountability gaps and shortcomings in the complex EU architecture of financial control. [less ▲]

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See detailThe role of the European Investment Bank in Times of COVID-19
Howarth, David UL; Kavvadia, Helen; Clifton, Judith et al

in McDonald, D.A.; Marois, T.; Barrowclough, D.V. (Eds.) Public Banks and Covid-19: Combatting the Pandemic With Public Finance. Municipal Services Project (2020)

The European Guarantee Fund (EGF) is spearheading European Investment Bank (EIB) action in response to Covid-19. It will provide guarantees to the EIB and the EIF to reimburse any possible losses incurred ... [more ▼]

The European Guarantee Fund (EGF) is spearheading European Investment Bank (EIB) action in response to Covid-19. It will provide guarantees to the EIB and the EIF to reimburse any possible losses incurred in their operations. By pooling credit risk across all of the EIB’s members, the overall average cost of the EGF will be significantly reduced, compared to national schemes. Financially speaking, this appears an efficient solution given the objectives of a Regional Development Bank – which the EIB can be categorised. Most of the EGF funding will be made available through financial intermediaries – National Promotional Banks and commercial banks. Once the funds are made available and the list of financial intermediaries established, companies can file requests directly with financial intermediaries. We argue that especially in view of the public health crisis, it is high time for the EIB to establish a health sector strategy and step up its contribution from its own funds, beyond risk-sharing facilities with the Member States and the Commission as EGF and IDFF respectively. In its response to Covid-19 economic crisis, it is imperative for the EIB to focus squarely on the final beneficiaries (SMEs, innovation, social and environmental projects) rather than the private financial intermediaries. For the EU’s public bank, the need for assuring transparency and accountability, in view of the increasing use of budgetary and Member States’ funds especially in the public good health sector, is higher than ever. [less ▲]

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See detail“The internet and the European market” from a multidisciplinary perspective: a “round-doc” discussion
Schafer, Valerie UL; Fickers, Andreas UL; Howarth, David UL et al

in Internet Histories: Digital Technology, Culture and Society (2020), (2),

Received 24 February 2020 Accepted 28 February 2020 KEYWORDS EU Market; Internet; Digital Market; Governance; Digital Europe; Regulation ABSTRACT David Howarth, Francesca Musiani, Julia Pohle and Dwayne ... [more ▼]

Received 24 February 2020 Accepted 28 February 2020 KEYWORDS EU Market; Internet; Digital Market; Governance; Digital Europe; Regulation ABSTRACT David Howarth, Francesca Musiani, Julia Pohle and Dwayne Winseck were invited to discuss the main topic of this special issue, “The internet and the EU market.” This conversation at the crossroads of several research areas (communication studies, soci- ology, science and technology studies and political science) brought together leading experts who shared their experience, research and expertise on the internet, European integration, gov- ernance issues, etc. They referred to several topics that are addressed in the papers in this issue, such as the taxation of digital services, net neutrality and the openness of networks, as they discussed questions related to the realities and limits of the notion of “Digital Europe”, changing discourses on the EU’s digital economy, the concept of European governance and the turning points and key events in the relationship between the internet and the EU market since the 1990s. [less ▲]

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See detailThe Difficult Construction of European Banking Union: Introduction
Howarth, David UL; Schild, Joachim

in Howarth, David; Schild, Joachim (Eds.) The Difficult Construction of European Banking Union (2020)

Banking Union represents one of the most important developments in European integration since the launch of Monetary Union. Furthermore, the design of the Banking Union agreed between 2012 and 2014 was a ... [more ▼]

Banking Union represents one of the most important developments in European integration since the launch of Monetary Union. Furthermore, the design of the Banking Union agreed between 2012 and 2014 was a messy compromise among European Union (EU) member states. It is not surprising then that Banking Union has sparked a lively academic debate and triggered an ever-growing number of publications from different disciplinary backgrounds. This edited volume is located at the intersection of two major waves of academic research on Banking Union. The first wave of academic work focuses upon the economic rationale underpinning the supranationalisation of control over banking—regulation, supervision, support and resolution—and the political dynamics and legal issues that shaped the design of the Banking Union agreed. This literature focuses upon Banking Union’s foundational phase between 2012 and 2014 when the major texts enshrining Banking Union in law were negotiated and adopted. The second stage of academic research analyses the functioning of the different elements of Banking Union. New research questions have been triggered by the—albeit limited—empirical evidence on the operation of the supranational supervision and resolution of banks. Contributions to this second wave of Banking Union-related research attempt to identify potentially dangerous lacunae and contribute to on-going reform debates. This edited volume brings together the work of sixteen scholars focused on the political, legal and economic debates surrounding the construction and operation of Banking Union, and its necessary reform. [less ▲]

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See detailThe Difficult Construction of European Banking Union
Howarth, David UL; Schild, Joachim

Book published by Routledge (2020)

The volume brings together the work of sixteen scholars focused on the diverse debates surrounding the construction and operation of Banking Union (BU), and its necessary reform. BU represents one of the ... [more ▼]

The volume brings together the work of sixteen scholars focused on the diverse debates surrounding the construction and operation of Banking Union (BU), and its necessary reform. BU represents one of the most important developments in European integration since the launch of Monetary Union. Furthermore, the design of the BU agreed between 2012 and 2014 was a messy compromise among EU member states. It is not surprising then that BU has sparked a lively academic debate and triggered an ever-growing number of publications from different disciplinary backgrounds. The first wave of academic work on BU focuses upon the economic rationale underpinning the supranationalisation of control over banking — regulation, supervision, support and resolution — and the political dynamics and legal issues that shaped the design of the Union agreed. This volume is located at the intersection of this first phase of academic research and a second stage which analyses the functioning of the different elements of BU. New research questions are triggered by the albeit limited empirical evidence on BU’s implementation and operation. Contributions to this second wave of research attempt to identify potentially dangerous lacunae and contribute to on-going reform debates. [less ▲]

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See detailIntroduction to ‘Economic and Monetary Union at Twenty: A Stocktaking of a Tumultuous Second decade’
Howarth, David UL; Verdun, Amy

in Journal of European Integration (2020), 42(3), 287-293

This contribution discusses the two main asymmetries of European Economic and Monetary Union (EMU) as they developed over the past two decades since the launch of the Single Currency. From the outset, EMU ... [more ▼]

This contribution discusses the two main asymmetries of European Economic and Monetary Union (EMU) as they developed over the past two decades since the launch of the Single Currency. From the outset, EMU involved asymmetric degrees of integration in the area of ‘economic’ union (less centralised governance) versus ‘monetary’ union (more supranational governance). With the outbreak of the Sovereign Debt Crisis in 2010, the regime-shaping relevance of a second asymmetry emerged: one roughly between the member states of the Euro Area ‘core’ and those in the ‘periphery’. Each of the two asymmetries have created a range of challenges—institutional, policy and political — that undermine the stability and sustainability of the EMU project. [less ▲]

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See detailOne money, two markets? EMU at twenty and European financial market integration
Howarth, David UL; Quaglia, Lucia

in Journal of European Integration (2020), 42(3), 433-448

This contribution combines neo-functionalism and historical institutionalism to understand the implications of differentiated integration in Economic and Monetary Union (EMU) and Banking Union (BU) for ... [more ▼]

This contribution combines neo-functionalism and historical institutionalism to understand the implications of differentiated integration in Economic and Monetary Union (EMU) and Banking Union (BU) for the single market in financial services in the European Union (EU). From the 1980s, the relaunch of the Single Market and monetary integration in the EU were presented by the supporters of EMU as mutually reinforcing, as in the logic of the Commission’s Report ‘One Market, One Money’. Initially, EMU appeared to reinforce financial integration, especially in the Euro Area banking sector, even though EMU was a case of differentiated integration in the EU. Subsequently, the incomplete EMU triggered the sovereign debt crisis, which undermined financial market integration and was addressed through the establishment of BU, which reinforced differentiated integration. Both EMU and BU have negative implications for the ‘singleness’ of the single market in financial services, potentially resulting in ‘One Money, Two Markets’. [less ▲]

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See detailThe politics of bank structural reform: Business power and agenda setting in the United Kingdom, France, and Germany
Howarth, David UL; James, Scott

in Business and Politics (2020), 22(1), 25-51

Following the financial crisis, the United Kingdom introduced major structural reforms to address concern about Too-Big-To-Fail (TBTF) banks, while France and Germany adopted much weaker reforms. This is ... [more ▼]

Following the financial crisis, the United Kingdom introduced major structural reforms to address concern about Too-Big-To-Fail (TBTF) banks, while France and Germany adopted much weaker reforms. This is puzzling given the presence of large universal banks engaged in market making activities in all three countries, which suffered significant losses during the international financial crisis, and given the commitments to reform made by political leaders in all three countries. The paper explains this policy divergence by analysing how dynamics of agenda setting contributed to the emergence of policy windows on structural reform. We explain the United Kingdom's decision to delegate the process to an independent commission as an example of venue shifting which helped to insulate the process from industry framing, and resulted in “conflict expansion” by mobilizing a wider coalition of actors in support of bank ringfencing. By contrast, in France and Germany the agenda was tightly managed through existing institutional venues, enabling industry to resist the framing of the issue around TBTF and limiting the role of non-business groups—a process we label as “conflict contraction.” We argue that analysis of agenda setting dynamics provides new insights into the cross-national variability of business power. [less ▲]

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See detailBank power and public policy since the financial crisis
Howarth, David UL; James, Scott; Macartney, Huw

in Business and Politics (2020), 22(1), 1-24

Despite much commentary in the media and the popular assumption that the banking industry exerts undue influence on government policy-making, the academic literature on the role of the banks since the ... [more ▼]

Despite much commentary in the media and the popular assumption that the banking industry exerts undue influence on government policy-making, the academic literature on the role of the banks since the 2008 financial crisis remains theoretically and empirically under-specified. In particular, we argue that different forms of financial power are often conflated, while favorable policy outcomes are too-readily assumed to be evidence of regulatory capture. In short, we still know relatively little about how bank influence varies over time and in different national contexts, the extent to which banking interests are unified or divided, and the conditions under which banks are capable of producing meaningful variation in policy outcomes. This article has three objectives: 1) to explain why the debate on bank influence matters; 2) to examine the evidence of bank influence since the international financial crisis; and 3) to set out a range of conceptual tools for thinking about bank power. [less ▲]

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See detailTheoretical Lessons from EMU and Banking Union: Plus ça change
Howarth, David UL; Quaglia, Lucia

in Howarth, David; Schild, Joachim (Eds.) The Difficult Construction of European Banking Union (2020)

Why did Euro Area member state governments decide to move to Banking Union (BU) — presented by proponents as a crucial move to ‘complete’ Economic and Monetary Union (EMU) — only in 2012, over twenty ... [more ▼]

Why did Euro Area member state governments decide to move to Banking Union (BU) — presented by proponents as a crucial move to ‘complete’ Economic and Monetary Union (EMU) — only in 2012, over twenty years after the adoption of the Maastricht Treaty? Why has a certain design for BU been chosen and some elements of this design prioritised over others? This paper interrogates previous academic accounts on the move to and the design of EMU — neofunctionalist, intergovernmentalist and constructivist — evaluating their explanatory power with reference to BU. It is argued that the asymmetrical design of EMU generated a variety of spill-overs and, hence, a neofunctionalist drive to supranationalise control over bank supervision and financial support for banks as part of the so-called ‘completion’ of EMU. However, intergovernmental negotiations informed by moral hazard and domestic political economy concerns explain the asymmetrical design of BU agreed by national governments. [less ▲]

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See detailAccountability in Post‐Crisis Eurozone Governance: The Tricky Case of the European Stability Mechanism
Howarth, David UL; Spendzharova, Aneta

in Journal of Common Market Studies (2019), 57(4), 894-911

Established at the height of the Eurozone sovereign debt crisis, the intergovernmental European Stability Mechanism (ESM) has, potentially, considerable influence over decisions on the provision of loans ... [more ▼]

Established at the height of the Eurozone sovereign debt crisis, the intergovernmental European Stability Mechanism (ESM) has, potentially, considerable influence over decisions on the provision of loans to Eurozone member state governments and on the recapitalization of banks. Legally and organizationally, the ESM is an international financial institution and thus its accountability can be compared to that of the International Monetary Fund (IMF) and other international financial institutions. However, the ESM’s governance structure and decision-making procedures show that it is deeply embedded in the Eurozone governance architecture, resulting in a dual institutional embeddedness. Focusing on vertical and horizontal accountability combined with a learning perspective on accountability, this article presents an assessment of the accountability mechanisms applicable to the idiosyncratic ESM and how these mechanisms work in practice. [less ▲]

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See detailThe democratic deficit and European Central Bank crisis monetary policies.
Högenauer, Anna-Lena UL; Howarth, David UL

in Maastricht Journal of European and Comparative Law (2019)

This article presents the argument that European Central Bank (ECB) policy-making from the start of the sovereign debt crisis in 2010 undermined the democratic legitimacy of the ECB. We start with the ... [more ▼]

This article presents the argument that European Central Bank (ECB) policy-making from the start of the sovereign debt crisis in 2010 undermined the democratic legitimacy of the ECB. We start with the argument – defended by a number of scholars including Majone and Moravcsik – that where European Union (EU) policy-making is technocratic and does not have significant redistributive implications it can benefit from depoliticization that does not undermine the democratic legitimacy of this policy-making. This is notably the case where EU institutions have narrow mandates and are constrained by super-majoritarian decision-making. Prior to the international financial crisis, the ECB’s monetary policies were shaped entirely by the interpretation that its mandate was primarily to ensure low inflation. From the outbreak of the sovereign debt crisis, the ECB adopted a range of policies which pushed its role well beyond that interpretation and engaged in a form of redistribution that directly undermined treaty provisions. [less ▲]

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See detailReinforcing Supranational Bank Regulation, Supervision, Support and Resolution in Europe: Introduction
Howarth, David UL; Schild, Joachim

in Journal of Economic Policy Reform (2019)

A decade on since the outbreak of the worst international financial crisis since the late 1920s, the effective design of EU bank regulation, supervision, support and resolution remains hotly contested, in ... [more ▼]

A decade on since the outbreak of the worst international financial crisis since the late 1920s, the effective design of EU bank regulation, supervision, support and resolution remains hotly contested, in both academic and policy-making circles. European Banking Union (BU), one of the most important developments in European integration since the Maastricht Treaty and the launch of Monetary Union, still ranks very high on the European Union’s reform agenda. Some reform proposals, such as the creation of the European Deposit Insurance Scheme (EDIS), have been placed on the backburner given German government concerns regarding the state of bank balance sheets in some euro area member states — and, specifically, bank holdings of nonperforming loans — and that incentives for future risk-taking have not been sufficiently reduced. Other reforms affecting all EU member states have met the determined opposition of a number of national governments and powerful bank interests, including the Commission’s proposal for a regulation on Bank Structural Reform (BSR), which was dropped by the Commission in late 2017. However, there are also a range of other legislative and institutional reforms designed to reinforce EU bank regulation and supervision which have either been proposed and / or adopted. The main objectives of these reforms are to make banking safer— and specifically to diminish the systemic effects of losses resulting from high risk bank activities — and to reinforce the ability of supervisory authorities to monitor effectively bank activity. By shedding light on a number of difficult issues facing these topics, the articles of this special issue seek to provide contributions that are helpful to both academics and policy makers. [less ▲]

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See detailThe European Investment Bank as Policy Entrepreneur and the Promotion of Public-Private Partnerships
Howarth, David UL; Liebe, Moritz

in New Political Economy (2019), Early View

This paper focuses on the important role of the European Investment Bank (EIB) in the European Union’s promotion of Public-Private Partnerships (PPPs). We first demonstrate the relative importance of the ... [more ▼]

This paper focuses on the important role of the European Investment Bank (EIB) in the European Union’s promotion of Public-Private Partnerships (PPPs). We first demonstrate the relative importance of the EIB in relation to the European Commission on the promotion of PPPs. We then argue that the activism of the EIB on PPPs can be explained in terms of the bank’s operation as a policy entrepreneur. The paper further explains that the entrepreneurial role of the EIB with regard to PPPs relied massively on the presence of a small number of, principally British, ‘norm entrepreneurs’ who actively promoted the PPP concept and the specific norms that supported it within the EIB. While there are indications that the EIB operated as a rational actor in its promotion of PPPs, we argue that ideas ultimately drove the pro-PPP activism of both individual EIB officials and the institution collectively. [less ▲]

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See detailThe Parliamentary Scrutiny of Euro Area National Central Banks
Högenauer, Anna-Lena UL; Howarth, David UL

in Public Administration (2018)

European Economic and Monetary Union (EMU) involves several core principles for the organization of participating national central banks (NCBs / CBs), including their independence from political ... [more ▼]

European Economic and Monetary Union (EMU) involves several core principles for the organization of participating national central banks (NCBs / CBs), including their independence from political institutions. Early studies show that the level of national parliamentary scrutiny over euro area NCBs varied (Lepper and Sterne 2002). In this context, our article examines the extent to which parliaments make use of four distinct control mechanisms to hold CBs accountable. We explain the very different levels of parliamentary scrutiny over NCBs in Germany, France and Belgium during the 2013-2016 period. We find that the level of scrutiny depends principally on the presence of a longstanding tradition of CB independence — and specifically the manner in which independence has been politicized and interpreted by the political class. We argue that the strength of the parliament can also explain some variation. [less ▲]

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See detailThe difficult construction of a European Deposit Insurance Scheme: a step too far in Banking Union?
Howarth, David UL; Quaglia, Lucia

in Journal of Economic Policy Reform (2018), 21(3), 190-209

The German Government refused to accept the development of a European Deposit Insurance Scheme (EDIS) for Banking Union member states. Publicly, the German Government was preoccupied with the creation of ... [more ▼]

The German Government refused to accept the development of a European Deposit Insurance Scheme (EDIS) for Banking Union member states. Publicly, the German Government was preoccupied with the creation of a moral hazard that common funds would create for banks in those participating countries that had weak banking systems. This paper argues that to understand German moral hazard concerns it is necessary to look beyond the ideational – notably concerns stemming from German Ordo-liberalism – and focus on the existing national institutional arrangements that the German Government sought to protect. German moral hazard concerns stemmed from the fear that well-funded German deposit guarantee schemes (DGS) – especially those of small savings and cooperative banks – could be tapped to compensate for underfunded (and largely ex post funded) DGS in other member states. We thus demonstrate that the difficulties facing the construction of an EDIS owe to the weakness of the previously agreed harmonization of national DGS. This failure to harmonize schemes beyond a low minimal standard can be explained through an analysis focused on national systems. Different existing national DGS stem from the different configuration of national banking systems, the longstanding relationships among national banks and well-entrenched regulatory frameworks. [less ▲]

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