Open Issues in European Central Banking [Hardcover]

With the start of EMU, the Eurosystem has taken over monetary policy for the 11 countries of the Euro-area. But the division of powers within the Eurosystem, between the European Central Bank and the constituent National Central Banks, is not satisfactory. This volume provides an analysis of the strengths and weaknesses of the Eurosystem and offers concrete proposals concerning the decision-making organs, balance sheets and the distribution of seigniorage.Introduction WHO IS IN CHARGE OF THE EUROSYSTEM? Introduction The Decision-Making Process What the Treaty States (and What it doesn't State) The Balance of Power The Risks of a Weak ECB Implementation The Interpretation of the Treaty The Underlying Reasons for Decentralization The Consequences of Decentralization Is Decentralization Sustainable? WHO TAKES CARE OF FINANCIAL STABILITY IN EUROPE? Introduction Preventing Financial Crises The Instruments Financial Regulation in the EU Prudential Supervision Financial Crisis Management Solvency and Liquidity Crises Bailing out Banks in Monetary Union The Lender-of-the-last-resort in Monetary Union Who (in the Eurosystem) should Lend in the Last Resort? Should the Eurosystem be Granted Supervisory Powers? Conclusions Annex: Does Prudential Supervision Interfere with Monetary Policy? ARE EUROPEAN CENTRAL BANKS OVER-CAPITALIZED? Introduction The Eurosystem and its Components A Comparative G-3 Perspective The Liability Side and Overall Size: a Comparison with the US and Japan The Composition of the Asset Side: Foreign Exchange Assets Cleaning the Eurosystem Balance Sheet A Lean Balance Sheet Conclusions WHO GETS THE SEIGNIORAGE? Introduction What is Seigniorage? The Treaty's Provisions The Problems The Agreed Non-Solution Alternative Approaches to Phasing-in Conclusions Annex: Legal Issues Annex: The Distribution of Seigniorage in the Context of the Fiscal Constitution of the EU HOW CAN THE EUROSYSTEM BECOME (AND REMAIN) INDEPENDENT? Introduction The Independence Provided bylC"