Kolumne in der
Frankfurter Allgemeine Sonntagszeitung
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The Feldstein-Horioka puzzle of highly correlated savings-investment ratios—and by implication moderate current and capital account imbalances—seemed to disappear in advanced economies during the course of the 1990s. Globalisation appeared to have finally made it possible for capital to flow to areas with excess returns, irrespective of national borders. With hindsight, however, we have to conclude that it was the upturn in the credit cycle and the associated increase in investors’ risk appetite, and not increased international integration (e.g. in the form of more global trade), which led to the emergence of international imbalances. [more]

"A stimulating read, Dr Mayer’s book combines a concise historical narrative of the events leading up to the euro with an imaginative suggested new architecture for the EMU. Particularly interesting are his insights on how a breakup, should it occur, would evolve."—Alan Greenspan, former Chairman of the Federal Reserve Board

"Thomas Mayer has written a fascinating and thought-provoking book on the origin, performance and problems of the euro area. He questions much of the conventional wisdom about these topics, and proposes novel solutions that run counter to the historically prevailing view that currency union can only survive within a “political union” of the eurozone."—Leszek Balcerowicz, Former Deputy Prime Minister, Finance Minister and President of the National Bank of Poland

"This fascinating and well-written book couldn’t be more timely. With the discussion on the eurozone’s future institutional framework in full swing, Thomas Mayer’s book provides highly relevant economic insights and political perspectives on the debate over how to make the European Monetary Union more stable and sustainable."—Axel Weber, UBS Chairman, former head of Germany’s central bank [more]

Despite apparent consensus that the creation of a ‘Banking Union’ is essential for the survival of the euro, progress is painfully slow. The Single Supervisory Mechanism may not be ready before the middle of next year, the Single Resolution Mechanism may require a laborious change of the EU Treaty and common deposit insurance has been postponed into the indefinite future. Any real progress has been prevented by the protracted fights over which government will be the payer of last resort when banks fail because of past bad loans. In this Policy Brief, Thomas Mayer suggests that a radically new approach is needed if there is any prospect of moving beyond this impasse to reach full Banking Union. Instead of trying to move from common bank supervision over to resolution and then on to deposit insurance, he argues that policy-makers should go backwards and start with deposit insurance, move from there to resolution, and end with supervision. [more]