Institutions and the Crisis”, Which Was Held at the EUI in Florence, Italy, on 26 April 2018
Total Page：16
File Type：pdf, Size：1020Kb
is book contains the proceedings of the conference “Institutions and the Crisis”, which was held at the EUI in Florence, Italy, on 26 April 2018. EDITED BY Franklin Allen Elena Carletti Mitu Gulati AUTHORS Lee C. Buchheit Bruno De Witte Aitor Erce Francesco Garzarelli Mitu Gulati Wolfgang Münchau Maria Patrin Jean Pisani-Ferry Tuomas Saarenheimo Pierre Schlosser Baudilio Tomé Muguruza Natacha Valla Georg Vanberg omas Wieser Jeromin Zettelmeyer Chiara Zilioli European University Institute Florence, Italy Brevan Howard Centre at Imperial College London, United Kingdom BAFFI CAREFIN, Bocconi University Milan, Italy Franklin Allen Elena Carletti Mitu Gulati FLORENCE SCHOOL OF BANKING & FINANCE FLORENCE SCHOOL OF BANKING & FINANCE INSTITUTIONS AND THE CRISIS INSTITUTIONS AND THE CRISIS EDITED BY Franklin Allen Elena Carletti Mitu Gulati AUTHORS Lee C. Buchheit Bruno De Witte Aitor Erce Francesco Garzarelli Mitu Gulati Wolfgang Münchau Maria Patrin Jean Pisani-Ferry Tuomas Saarenheimo Pierre Schlosser Baudilio Tomé Muguruza Natacha Valla Georg Vanberg Thomas Wieser Jeromin Zettelmeyer Chiara Zilioli European University Institute, Florence, Italy Brevan Howard Centre at Imperial College London, United Kingdom BAFFI CAREFIN, Bocconi University Milan, Italy Published by European University Institute (EUI) Via dei Roccettini 9, I-50014 San Domenico di Fiesole (FI) Italy First Published 2018 ISBN:978-92-9084-704-5 doi:10.2870/421536 QM-01-18-894-EN-N © European University Institute, 2018 Editorial matter and selection © editors 2018 Chapters © authors individually 2018 This text may be downloaded only for personal research purposes. Any additional reproduction for other purposes, whether in hard copies or electronically, requires the consent of the Florence School of Banking and Finance. If cited or quoted, reference should be made to the full name of the author(s), editor(s), the title, the year and the publisher. Views expressed in this publication reflect the opinion of individual authors and not those of the European University Institute. Cover artwork: Christopher Trollen Contents The Contributors vii Acknowledgements xiii Preface xv Keynote Speech - Euro area reform: reflections on an initiative, 1 Jean Pisani-Ferry Dinner Speech - Europe and financial crises in the future, 27 Natacha Valla PART I - A Look Back: Evaluating European Institutions’ Crisis Management 35 Official Lending in the Euro Area: A Look Back, Aitor Erce 37 Regulatory Integration and Political Subordination, 57 Tuomas Saarenheimo The European Court of Auditors and the EU’s Developing Economic and Financial Architecture, Baudilio Tomé Muguruza 69 Why Has Euro Crisis Management Been So Hard?, Jeromin Zettelmeyer 83 PART II - Disentangling The Crisis And The Courts 93 Use of the Local Law Advantage In the Restructuring of European Sovereign Bonds, Lee C. Buchheit 95 Judicialization of the Euro Crisis? A Critical Evaluation, Bruno De Witte 103 Paper Tigers (or How Much Will Courts Protect Rights in a Financial Crisis?), Mitu Gulati & Georg Vanberg 111 From Form to Substance: Judicial Control on Crisis Decisions of the EU Institutions (with a focus on the Court of Justice of the European Union), Chiara Zilioli 133 PART III - The Way Forward: The Eurozone’s Institutional Prospects 149 Macro Rates Views: Is EMU ‘Break-Up’ Risk Out For Good?, 151 Francesco U. Garzarelli Institutions and the Crisis, Wolfgang Münchau 163 Deepening of EMU: Some Topical Considerations, Thomas Wieser 173 Putting the Cart before the Horse? A critical appraisal of the European Finance Minister idea, Maria Patrin and Pierre Schlosser 183 Conference Programme 199 VI VII THE CONTRIBUTORS Franklin Allen is Professor of Finance and Economics and Director of the Brevan Howard Centre at Imperial College London since July 2014. Previously he was on the faculty of the Wharton School of the University of Pennsylvania, where he now has Emeritus status. He was formerly Vice Dean and Director of Wharton Doctoral Programs, Co-Director of the Wharton Financial Institutions Center, Executive Editor of the Review of Financial Studies and Managing Editor of the Review of Finance. He is a past President of the American Finance Association, the Western Finance Association, the Society for Financial Studies, the Financial Intermedia- tion Research Society and the Financial Management Association, and a Fellow of the British Academy and the Econometric Society. His main areas of interest are corporate finance, asset pricing, financial innovation, comparative financial systems, and financial crises. Lee C. Buchheit is a senior partner at the law firm Cleary Gottlieb Steen and Hamilton in New York, focusing his practice on international finan- cial transactions, including sovereign debt management, privatization and project finance. He joined the firm in 1976 and became a partner in 1984, holding positions in its offices in Hong Kong, London and Wash- ington DC. He is the author of two books in the field of international law and more than 40 articles. He was included in the Financial Times’ list of the 10 most ‘Innovative Individuals’ of 2012 for his work on the Greek debt restructuring. Earlier, the International Financial Law Review hon- ored him with its inaugural Lifetime Achievement Award in 2010 for his contributions to international finance. Elena Carletti is Professor of Finance at Bocconi University and Scientific Director of the Florence School of Banking and Finance at the European University Institute (EUI). Previously she was Professor of Economics VIII The Contributors at the EUI, holding a joint chair in the Economics Department and the Robert Schuman Centre for Advanced Studies. She is a member of the Advisory Scientific Committee of the European Systemic Risk Board and Research Fellow at CEPR, Fellow of the Finance Theory Group, CESifo, IGIER and the Wharton Financial Institutions Center. Among other appointments, she has worked as consultant for the OECD and the World Bank, has served in the review panel of the Irish Central Bank and of the Riskbank and has been a board member of the Financial Intermediation Research Society. Her main research areas are Financial Intermediation, Financial Crises and Regulation, Competition Policy, Corporate Govern- ance and Sovereign Debt. Bruno de Witte is Professor of European Law at Maastricht University, co-director of the Maastricht Centre for European Law and part-time Professor of Law at the European University Institute. Previously he was full-time Professor of European Union Law at the European Uni- versity Institute and Professor of European law at Maastricht University. He obtained his PhD at the EUI in 1985. He is member of the Board of Editors of several journals, such as the European Human Rights Law Review, and is a member of the Advisory Board of the Scuola Superiore Sant’Anna (Pisa), of the Salzburg Centre of European Union Studies, and of the Centro di ricerca sulle organizzazioni internazionali ed europee at Università Luiss Guido Carli (Rome). Aitor Erce is Principal Economist at the European Stability Mechanism (on leave from Bank of Spain). Before joining the ESM, he worked in the International Affairs Directorate of the Bank of Spain. Since 2012, Aitor is an associate researcher at the Dallas Fed’s Globalization and Mone- tary Policy Institute and, since 2013, an affiliate researcher with Warwick University’s IMF Research Network. His research has been published in international peer-reviewed journals such as the IMF Economic Review, the Journal of Monetary Economics and Governance. Aitor holds an MSc in finance from CEMFI and a PhD in economics from the European Uni- versity Institute. His interests include sovereign risk, capital flows, inter- national financial architecture and crises resolution. Francesco U. Garzarelli is Advisory Director in the Global Investment Research Division at Goldman Sachs. He was previously partner of the firm and its co-Chief Global Markets Economist, with responsibility for research, people and processes across rates, credit, mortgages and FX/EM IX The Contributors strategy. Francesco earned an MSc in Finance from the London Business School. He is a graduate cum laude of Bocconi University in Milan and studied at the Hochschule St.Gallen. He sits on the Independent Advi- sory Board to the Italian Ambassador in London, and on the UK Board of Trustees of the International Rescue Committee (IRC). Married, he lives in North London with two secondary school aged children. Mitu Gulati is on the faculty of the Duke University School of Law. His current research areas are Sovereign Debt Restructuring, Contract Evo- lution and Measuring the Impact of Changes in the Rule of Law. He has forthcoming work in the Journal of Financial Regulation and the Capital Markets Law Journal. Wolfgang Münchau is director and co-founder of Eurointelligence, a service that provides daily information about the euro area, targeted at investors, academics and policy makers. He is also the European eco- nomic columnist of the Financial Times. He was one of the founding members of Financial Times Deutschland, where he served as deputy editor from 1999 until 2001 and as editor-in-chief from 2001 until 2003. Previous appointments include correspondent posts for the Financial Times and the Times of London in Washington, Brussels and Frank- furt. He was awarded the Wincott Young Financial Journalist of the Year award in 1989.He published three German-language books. His book ‘Vorbeben’, on the financial crisis, has received the prestigious