Europe Institute


Research projects

The work of the Europe Institute.

The Future of Monetary and Financial Integration in the EU


The Project

This thee-year project is funded by the European Union. Its purpose is to examine the impact of the developments in the EU since the start of the global financial crisis on monetary and financial stability, fiscal sustainability and society at large.

The project is multidisciplinary in character and seeks to offer practical advice on the development of “banking union” and other steps in the deeper monetary and financial integration of the EU over the future.

Furthermore, this project aims to understand the impact of the strains the process of deeper monetary and financial integration imposes on society in order to assist in achieving a more harmonious approach that will unify rather than divide EU member states.

The Team

· Prof. David Mayes

· Prof. Jean-Jacques Courtine

· Prof. Cris Shore

· Dr Ioanna Karamichailidou

 

The Research Plan

Professor David Mayes

Year 1: Practical Issues in Monetary and Financial Integration

David G. Mayes

The first year will cover the practicalities of the process of monetary and financial integration in Europe focusing in particular on the European Banking Union, the concept and plausibility of living wills and bailing in as well as the ability to implement early warning systems. The experience of Australia and New Zealand in integrating in the same field will be used as a comparator to seek mutual lessons.

 

(1) Putting substance to the idea of living wills to improve the chance of recovery before resolution in the EU

Following some early work by Thomas Huertas (formerly FSA in the UK) and an article by a collaborator (Geoffrey Wood, Cass Business School) relatively little has been published on this topic although it has been the subject of several op-ed pieces. The purpose of this research therefore will be to put existing ideas into a coherent framework and sort out what the practical difficulties are of such arrangements and hence how these difficulties might be believably circumvented. Living Wills are plans that need to be credible. It is not just that they need to work if they are ever called on but that they need to look as if they will work. This overlaps with the work of the RBNZ which claims to have been able to put such a scheme together, labelled ‘Open Bank Resolution’.

(2) The Impracticalities in NZ’s proposals for handling the Australian banks and their lessons for the EU

New Zealand has developed a unique scheme whereby banks are recapitalized (involuntarily) by their creditors – including depositors above a de minimis level. Uniquely in the OECD NZ also does not have deposit insurance. This therefore is a strong precursor of the bail in arrangements incorporated into the EU Recovery and Resolution Directive. There is little consonance therefore with Australia, which not only has extensive deposit insurance but has made it clear that their main banks will not close and has proposed setting up a Resolution Fund, similar to those required under the RRD. It is debatable whether the NZ scheme will work although some of its principal features, such as the requirement for all systemic banks to be locally incorporated and capable of running on their own within a day, have received much interest overseas. These arrangements thus provide a useful basis both to contrast with the EU plans but also to test out whether separate country arrangements might work before all aspects of banking union are complete across the EU.

(3) A way forward for banking union in Europe based on the lessons from the US

The problems faced by the EU in developing banking union are not only highly topical but are developing by the moment. We have therefore collected together many of the main experts in the field and organised a symposium on the topic the results of which will be published in a book by Routledge.

(4) Improving early warning systems for banking problems in the EU

This strand of the research is well advanced, with a joint article by the Principal Investigator and Hanno Stremmel having been drafted. This empirical piece, which uses US data, is being extended to the EU.

 

For detailed outcome of Year 1, please check here.

Publications

European Banking Union: Prospects and Challenges, edited by Juan E. Castañeda, David G. Mayes and Geoffrey Wood, Abingdon: Routledge, ISBN: 978-1-138-90650-1, 2015.

‘Plausible recovery and resolution plans for cross-border financial institutions’, Giannoula Karamichailidou and David G. Mayes, Chapter 3 in J Castaneda, D G. Mayes and G Wood, European Banking Union: Prospects and Challenges, Abingdon: Routledge, 2015

‘Closer Financial Integration between Australia and New Zealand? Lessons from the EU’ David G. Mayes JASSA, December 2015.

‘Bank Structure and Resolution’, David G. Mayes, Journal of International Banking and Financial Law, December 2014.

‘The Funding of Bank Resolution’, David G. Mayes, in Jens-Hinrich Binder and Dalvinder Singh, Bank Resolution: The European Perspective, Oxford: Oxford University Press, 2015.

*
WORKING PAPER 2015/1 Bank Resolution and Recovery
By: Giannoula Karamichailidou and David G. Mayes (292.7 kB, PDF)
*
WORKING PAPER 2015/3 Can Financial Cycle Dynamics Predit Bank Distress?
By: Giannoula Karamichailidou, David G. Mayes, and Hanno Stremmel (305.5 kB, PDF)

 

 

jean-jacques-courtine_tb

Year 2: Anxiety and Monetary and Financial Integration

Jean Jacques Courtine

 

 

(1) A genealogy of European anxieties

This project will try to reconstruct a genealogy of anxiety by determining how it was perceived at the birth of European democracy (Tocqueville), at the time of mass society and totalitarianism (Arendt) and in the psychological structure of the individual mind (Freud). This first part of the investigation will be carried out from the point of view of a history of the idea of ‘anxiety’ – or of its ‘archaeology’ as Michel Foucault would call it - and will show the conditions of its emergence and later transformations in contemporary thought and sensitivities.

(2) Administration of anxiety

This project will endeavour to analyse the various devices of the administration of anxiety, the discourse and images fabricated by the media as well as various agencies and upon which can rest a politics of fear. Based on a vast survey of European political, social, cultural and economic news, this second line of research will be grounded on the discourse analysis of the European press, and will explore the interdiscursivity of anxiety. It will not be looking for the usual catalogue of separate risks and distinct dangers, but rather for what European fears have in common, across borders and cultures: the liquid subjective layer of anxiety underlying and feeding them.

(3) Emotions in Europe

Another goal of the project is to bring together the work separately done on emotions in Europe and to build an international research network on the subject.

 

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cris-shore

Year 3: Socio-cultural Implications of Monetary and Financial Integration

Cris Shore, Anthropology Department, University of Auckland

  

  

(1) The other face of the coin; the socio-cultural role of money in contemporary societies. Lessons from Europe

Building on the work of Giovanni Moro (2013) Thomas Risse (2013) and others, this part of the research will examine the role that the single currency has played in the construction of European identity and EU citizenship, and in promoting social cohesion. The relationship between currencies and citizenship will be analysed in the context of wider theoretical approaches to the history and anthropology of money and, in particular, the implications of monetary union for European integration. The rationale behind the EU project for economic and monetary union (EMU) and the creation of the European single currency was the assumed benefits (or ‘positive spill-over’ effects) that the Euro would bring for forging ever-closer political union. The crisis in the Eurozone since 2010, particularly its effects on the weaker economies of Portugal, Ireland, Greece and Spain, has thrown into question these assumptions. The continuing state of economic and political instability in countries such as Greece raises important questions about the longer-term implications of these processes of monetary integration. It remains to be seen whether or not Greece will exit the Eurozone, or whether the solution to instability in the Eurozone will necessarily require ever tighter and more centralised forms of economic governance from Brussels. This project aims to contribute new perspectives on these important debates. The first task is to prepare an article that will frame the problems of the Eurozone – and possible solutions to existing the euro crisis – from a more sociological and anthropological perspective. This work will also draw on the work of Douglas Holmes in constructing a more ethnographically informed understanding of the European Central Bank.

(2) Monetary and financial union and social cohesion: The future of economic and monetary integration in Europe

Building on the previous historical and comparative analysis, this part of the research will examine the impact of the current debt crisis on social and political relations within and between EU member states and the implications of these shifting relations for social cohesion in the EU. The architects of the single currency saw the euro as a vehicle that would weaken nationalism and strengthen solidarity among fellow Europeans. For the first ten years of its existence, under more fortuitous economic circumstances, the euro performed that task well. Today, however, monetary union has come to symbolize many of the cleavages that most divide Europe. Politicians in Greece, Italy, Portugal and Spain complain that democracy is being undermined in their countries as economic and political decision-making has shifted to the European Central Bank. Economic austerity has provoked major political tensions and social unrest throughout Europe and given rise to a new wave of neo-nationalism and right wing extremism. The austerity measures have been described as a form of neo-colonialism.

This is a fascinating time to be studying the EU as it seeks to resolve these problems. As an experiment in transnational community-building and monetary integration, the Eurozone provides important lessons for the rest of the world, including Asia and Australasia where the EU has long served as a model to emulate. This part of the research will use comparative ethnographic insights and anthropological analyses of the implications of living under regimes of austerity. It asks, how have citizens in the so-called PIGS countries engaged with austerity and how is austerity changing social relations and cultural practices?

  

RECON


RECON (‘Reconstituting Democracy’) is an Integrated Project supported by the European Commission’s Sixth Framework Programme for Research, Priority 7: Citizens and governance in a knowledge-based society. Its broad objective is to clarify whether democracy is possible under conditions of pluralism, diversity and complex multilevel governance.

The project includes 21 partner institutions and more than 100 participating researchers across Europe. RECON is coordinated by ARENA – Centre for European Studies at the University of Oslo. The project is set to run until December 2011, and is financed by a grant of almost $300,000 under the European Commission's FP6 programme. More information about the project can be found by visiting the RECON website at www.reconproject.eu.

The Europe Institute was selected to join the project in 2008 following an international competition. The EI’s RECON team, led by David Mayes, includes Cris Shore, Christine Cheyne (Massey) and Anna Michalski (Fudan University, Shanghai), with research support from Tess Altman, Katherine Lyons, Zaidah Mustaffa and Mark Thomson.

Since joining RECON, the Europe Institute team has written seven working papers on the relationship between welfare policy and social insurance in the EU and the development of new approaches to democracy. Two of the papers (co-authored by Tess Altman) were presented at a seminar in mid-August, with the remaining papers presented to an audience of staff and students at a symposium organised in October.The intention is to bring these and two other papers together in an edited book next year, to be coordinated by Anna Michalski.

The Europe Institute is also coordinating a workshop in February 2011 in Oslo on ‘The Costs of Children’. This facet of the EI’s RECON work acts as a case study into the impact of having children on parents, particularly mothers, in different European countries. In preparation for this workshop, one further working paper on childcare in the EU explores the issues that having children raises from an employment and gender-equality perspective.

The workshop will bring together researchers from across Europe and Australasia to discuss how far different social regimes cope with the bearing and raising of children, and how far the principle of gender equality actually applies. We intend to publish many of the workshop papers as an edited book, to be coordinated by David Mayes and Mark Thomson.

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IRSES


The EU Marie-Curie IRSES and MoRST-funded research programme, ‘University Reform, Globalization and Education’ (‘URGE’) is a research exchange partnership involving teams of researchers at the Universities of Auckland, Aarhus and Bristol.

Cris Shore leads the Auckland team, which includes members from three faculties; Elizabeth Rata and Dr. Airini (Education); Chris Tremewan, Lynette Read and Melissa Spencer (Arts), and Nick Lewis (Science). The project officially commenced on 1 January 2010.

Between March and December Auckland hosted visits from Associate Professors Stavros Moutsios (Aarhus) and Nils Krieger (Aarhus), and Professor Susan Robertson and Roger Dale (Bristol). A major symposium on higher education reform and globalisation held at Auckland in May attracted participants from across the University as well as members of the public and other universities.

This was followed by a week of seminars and knowledge transfer activities in Bristol in December, where Melissa Spencer, Nick Lewis, Chris Tremewan and Cris Shore each spent a month as visitors.

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Other research projects


During 2009 David Mayes has worked on:

  • ‘Evaluating the ECB’s Monetary Policy’ for the European Parliament
  • ‘Introducing Prompt Corrective Action in Europe’ for the Bank of Finland
  • ‘Improving Bank Insolvency Procedures’ for Norges Bank
  • ‘The Impact of Financial Crises on Regulation and Competition’ for the OECD
  • ‘Lessons for Financial Regulation in Asia from the Crisis’ for the Asian Development Bank Institute, which included the organisation of a conference in Tokyo

He was a visiting research fellow at CESifo in Munich and has now been made a Research Fellow of CESifo.
 

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