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英国论文网:British and Dutch GDP:The spread of the cri(48)


bank defaults, the leaders of the 15 euro-zone countries have reached an agreement
on a plan that follows the broad outline of the British bail-out plan – governments
will buy equity stakes in banks and will guarantee new borrowing to
unblock the interbank market. Together with the announcement that the ECB will
create an unsecured lending facility to purchase commercial paper by banks, this
plan has finally managed to instil some confidence into the markets, as witnessed
by the immediate jump of stock prices.
Devil in the details
Of course, while the broad lines of these interventions are clear, much is still
unknown about their detailed design and implementation – and this is a case
where the devil is in the details. How will each government determine the equity
stakes to be bought in distressed banks? Clearly, governments should not bail out
all banks irrespective of their degree of solvency. The same issue arises for the provision
of loan guarantees and the purchase of commercial paper from banks.
Presumably equity injections and loan guarantees should be implemented in close
cooperation with the relevant banks’ main supervisors, as already argued by Javier
Suarez.1
But other ‘details’ are no less important for the long-term outcome of the bailout.
What will ensure that these equity injections and the implied partial or total
nationalisations of European banks will not take us back to the era of widespread
The European response to the crisis:
Not quite there yet
Marco Pagano
University of Naples Federico II and CEPR
69
1 See Javier Suarez, ‘The Need for an Emergency Bank Debt Insurance Mechanism,’ CEPR Policy Insight No. 19,
March 2008.
state control over banks? In the UK, Germany, France and Italy (as well as in the
US), governments are pledging that they will take equity stakes in the form of preferred
shares and that they regard this as a temporary investment, to be eventually
sold back to the market once the crisis is over. But are such pledges common to
all of the Euro-area governments? And in the countries where governments made
them, what guarantees that they will be upheld, and over which time horizon?
Governments as passive investors
A related question is whether governments will behave as passive investors or
wield some control over the key decisions of the banks that they bail out.
Historical experience from past crises shows that governments tend to take an
active role in controlling the institutions that they bailed out. This applies, for
instance, to the Reconstruction Finance Corporation created by President Herbert
Hoover in 1932 and to the Institute for Industrial Reconstruction (IRI) created in
Italy during the Great Depression. It also applies to the more recent experience of


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