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英国论文网:British and Dutch GDP:The spread of the cri(55)


bank run. Hence it was certainly useful for the euro area summit to state the obvious.
European governments will not let any systemically important bank fail. This
is not news, but its restatement should still contribute to reduce the sense of panic
prevailing in financial markets.
The real issue in Europe had always been the question of burden sharing – i.e.
who pays for the losses at a trans-national bank. The case of Fortis does not
constitute a good precedent, as this issue was not really settled. Moreover, the different
pieces of Fortis had not yet been tightly integrated, so it was still relatively
easy to cut the bank into three parts operating (now independently) in the three
Benelux countries. This is one way in which the current situation is different from
national banking crisis.
While stopping the panic was the immediate priority, the real question is
whether Europe can now avoid a credit crunch, i.e. a sharp slow down in bank
lending. A credit crunch would lead to a large loss of output, but this seems
unavoidable as banks will now feel that they first have to rebuild their capital and
their liquidity before they can extend new credit.
This issue is particularly acute for the inter-bank market, and its urgency is by
now understood by all policy-makers. The inter-bank market has become dysfunctional
almost everywhere. This market is important because it channels funds
Can Europe take care of its own
financial crisis?
Daniel Gros
Centre for European Policy Studies
77
from banks that collect more deposits than they can usefully lend out to banks
that have more credit-worthy customers than deposits. If this distribution mechanism
does not work, banks with few deposits must cut lending (making the
second problem much worse).
How to revive the inter-bank market?
How to revive the inter-bank market? The crisis has now become so acute that
banks refuse to lend short even if they have the funding. Eurozone banks prefer
to deposit surplus funds at the ECB’s low yielding deposit facility rather than to
lend to other banks. The ECB has de facto become the clearing house for the
collateralised inter-bank market in the euro area. This part of Europe is working.
However, the normal, unsecured, inter-bank market remains frozen.
Breaking the negative feedback: The need for European
cooperation
This issue needs to be tackled, but no country can achieve it on its own since the
bulk of the inter-bank market is spans national borders. This is another difference
between national banking crises and the current situation in the euro area. What
is needed is a coordinated approach, as proposed by the UK – but at the euro area
level. The ‘action plan’ of the euro area countries emphasises this point, but it
seems to be headed in the wrong direction.


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