Financial oversight, the third flawed pillar of the European Union: the missing piece in the Arestis-Sawyer critique of EMU macropolicy design

This paper presents a chronological survey of the 20 academic papers that Malcolm authored or co-authored between 1997 and 2017 on the flawed design - and hence flawed implementation - of the European Monetary Union (EMU)'s macroeconomic policy pillars. We augment his analyses by pointing out a...

Full description

Saved in:

Bibliographic Details
Published in:	International review of applied economics 2021-07, Vol.35 (3-4), p.371-388
Main Authors:	Dymski, Gary A., Kaltenbrunner, Annina
Format:	Article
Language:	eng
Subjects:	Austerity policy Banking Economic crisis Economic growth European Monetary Union financial crisis International finance macroeconomic and financial policy pillars Macroeconomics Malcolm Sawyer megabanks Monetary unions Oversight Political leadership Regulation of financial institutions
Online Access:	Get full text
Tags:	Add Tag No Tags, Be the first to tag this record!

Description
Summary:	This paper presents a chronological survey of the 20 academic papers that Malcolm authored or co-authored between 1997 and 2017 on the flawed design - and hence flawed implementation - of the European Monetary Union (EMU)'s macroeconomic policy pillars. We augment his analyses by pointing out a third - complementary - design flaw: the EMU's two-tiered structure of financial regulation and oversight. While this financial pillar aimed at reconciling Europe's historically bank-based financial systems with large European banks' entry into global financial competition, it created a combustible mix when combined with the EMU's macroeconomic-policy pillars. The Global Financial Crisis lit the fire: member-nations, forced to rescue their domestically-chartered too-big-to-fail megabanks, had to adopt austerity policies that both slowed the pace of post-crisis economic growth and eroded support for pro-Union political leaders. Only marginal changes have been made in these policy pillars post-crisis. Consequently, Europe faces a financial bifurcation point: either to continue 'whatever it takes' support for its megabanks, or to rethink both its financial architecture and its macroeconomic and financial policy pillars.
ISSN:	0269-2171 1465-3486