Proposal for redesigning the financial system: lessons learned from the crisis

this paper analyzes the singularities inherent to the financial industry, in relation to other businesses, and its implications to financial crises throughout history. The efficient markets hypothesis is questioned, and its impact on the deregulation of the financial system is analyzed. Finally, the causes of the current crisis are investigated, and the general lines to be addressed for the redesign of a financial system to achieve an efficient and equitable capitalism are suggested.

The neglected side of banking union: reshaping Europe’s financial system. Bruegel Policy Contribution, 14 September 2013

This Policy Contribution...discusses how Europe's financial system could and should be reshaped. It starts from two basic points: First, the banking system needs to be credibly de-linked from the sovereigns and banks should operate across borders. Europe needs fewer national champions. Second, other forms of financial intermediation need to be developed. Both steps require a significant stepping up of the policy system, including a single resolution mechanism. Together, this will render Europe’s financial system more stable, more efficient and more conducive to growth.

The effort to stabilise the financial system in Japan: an outline and the characteristics of the programme for financial revival. Bruegel Working Paper 2015/02, 18 March 2015

This Working Paper provides an overview of the Programme for Financial Revival announced in October 2002 in Japan. The programme aimed to dramatically reduce the large amount of non-performing loans that remained until the end of the 1990s. In addition to solving the problem of bad loans, the Programme for Financial Revival aimed to build a strong financial system. For this purpose, the programme comprised three pillars: 1) creation of a new framework for the financial system, 2) creation of a new framework for corporate revitalisation, 3) creation of a new framework for financial administration. The Japanese experience suggests that despite its delayed introduction, this programme may be considered successful in going some way to drastically reduce non-performing loans and stabilise the financial system. Japan’s financial problems and their resolution since the 1990s provide a number of lessons for other economies, particularly for Europe in relation to the difficulties over the euro.

Building a Capital Markets Union….or designing a financial system for the euro area? CEPS Commentary, 2 June 2015

In this CEPS Commentary, economists Anton Brender, Florence Pisani and Daniel Gros challenge the foundation on which the European Commission launched a key debate earlier this year on the development of the EU’s financial system, with publication of its Green Paper "Building a Capital Markets Union". While acknowledging that a single capital market could be useful in the European Union, they argue that it is extremely dangerous to conduct one and the same monetary policy in an area with broadly varying financial practices and structures – as the first 15 years of the euro area's history have vividly shown. They conclude that financial integration of the countries in EMU must receive top priority in a process that the rest of the European Union may then subsequently join.

Fine-tuning the use of bail-in to promote a stronger EU financial system. CEPS Special Report No. 136/April 2016

This paper discusses the application of the new European rules for burden-sharing and bail-in in the banking sector, in view of their ability to accommodate broader policy goals of aggregate financial stability. It finds that the Treaty principles and the new discipline of state aid and the restructuring of banks provide a solid framework for combating moral hazard and removing incentives that encourage excessive risk-taking by bankers. However, the application of the new rules may have become excessively attentive to the case-by-case evaluation of individual institutions, while perhaps losing sight of the aggregate policy needs of the banking system. Indeed, in this first phase of the banking union, while large segments of the EU banking sector still require a substantial restructuring and recapitalisation, the market may not be able to provide all the needed resources in the current environment of depressed profitability and low growth. Thus, a systemic market failure may be making the problem impossible to fix without resorting to temporary public support. But the risk of large write-offs of capital instruments due to burden-sharing and bail-in may represent an insurmountable obstacle to such public support as it may set in motion an investors’ flight. The paper concludes by showing that existing rules do contain the flexibility required to accommodate aggregate policy requirements in the general interest, and outlines a public support scheme for the precautionary recapitalisation of solvent banks that would be compliant with EU law.

Branching policies for the nation's financial system /

"Statement before the Subcommittee on Financial Institutions, United States Senate Committee on Banking, Housing, and Urban Affairs, presented on December 8, 1976, San Francisco, California."

Between Principle and Practicality: A Dynamic Realist Examination of Independence in the Canadian Justice System

This work examines independence in the Canadian justice system using an approach adapted from new legal realist scholarship called ‘dynamic realism’. This approach proposes that issues in law must be considered in relation to their recursive and simultaneous development with historic, social and political events. Such events describe ‘law in action’ and more holistically demonstrate principles like independence, rule of law and access to justice. My dynamic realist analysis of independence in the justice system employs a range methodological tools and approaches from the social sciences, including: historical and historiographical study; public administrative; policy and institutional analysis; an empirical component; as well as constitutional, statutory interpretation and jurisprudential analysis. In my view, principles like independence represent aspirational ideals in law which can be better understood by examining how they manifest in legal culture and in the legal system. This examination focuses on the principle and practice of independence for both lawyers and judges in the justice system, but highlights the independence of the Bar. It considers the inter-relation between lawyer independence and the ongoing refinement of judicial independence in Canadian law. It also considers both independence of the Bar and the Judiciary in the context of the administration of justice, and practically illustrates the interaction between these principles through a case study of a specific aspect of the court system. This work also focuses on recent developments in the principle of Bar independence and its relation to an emerging school of professionalism scholarship in Canada. The work concludes by describing the principle of independence as both conditional and dynamic, but rooted in a unitary concept for both lawyers and judges. In short, independence can be defined as impartiality, neutrality and autonomy of legal decision-makers in the justice system to apply, protect and improve the law for what has become its primary normative purpose: facilitating access to justice. While both independence of the Bar and the Judiciary are required to support access to independent courts, some recent developments suggest the practical interactions between independence and access need to be the subject of further research, to better account for both the principles and the practicalities of the Canadian justice system.