There have been numerous books examining the 2008 financial crisis from either a U.S. or European perspective. Tamim Bayoumi is the first to explain how the Euro crisis and U.S. housing crash were, in fact, parasitically intertwined.
Starting in the 1980s, Bayoumi outlines the cumulative policy errors that undermined the stability of both the European and U.S. financial sectors, highlighting the catalytic role played by European mega banks that exploited lax regulation to expand into the U.S. market and financed unsustainable bubbles on both continents. U.S. banks increasingly sold sub-par loans to under-regulated European and U.S. shadow banks and, when the bubbles burst, the losses whipsawed back to the core of the European banking system. A much-needed, fresh look at the origins of the crisis, Bayoumi’s analysis concludes that policy makers are ignorant of what still needs to be done both to complete the cleanup and to prevent future crises.
Mr. Charles Enoch, Wouter Bossu, Carlos Caceres, and Ms. Diva Singh
With growth slowing across much of the Latin America as a result of the end of the commodity supercycle and economic rebalancing in China, as well as fragmentation of the international banking system, policies to stimulate growth are needed. This book examines the financial landscapes of seven Latin American economies—Brazil, Chile, Colombia, Mexico, Panama, Peru, and Uruguay—and makes a case for them to pursue regional financial integration. Chapters set out the benefits to the region of financial integration, the barriers to cross-border activity in banks, insurance companies, pension funds, and capital markets, as well as recommendations to address these barriers. Finally, the volume makes the case that regional integration now could be a step toward global integration in the short term.
Mr. Paulo Drummond, Mr. S. K Wajid, and Mr. Oral Williams
The countries in the East African Community (EAC) are among the fastest growing economies in sub-Saharan Africa. The EAC countries are making significant progress toward financial integration, including harmonization of supervisory arrangements and practices and the modernization of monetary policy frameworks. This book focuses on regional integration in the EAC and argues that the establishment of a time table for the eliminating the sensitive-products list and establishing a supranational legal framework for resolving trade disputes are important reforms that should foster regional integration.
Mr. Joannes Mongardini, Mr. Tamon Asonuma, Olivier Basdevant, Mr. Alfredo Cuevas, Mr. Xavier Debrun, Lars Holger Engstrom, Imelda M. Flores Vazquez, Mr. Vitaliy Kramarenko, Mr. Lamin Y Leigh, Mr. Paul R Masson, and Ms. Genevieve Verdier
The Southern African Customs Union (SACU) is the oldest customs union in the world, with significant opportunities ahead for creating higher economic growth and increased welfare benefits to the people of the region, by fulfilling its vision to become an economic community with a common market and monetary union. This volume describes policy options to address the barriers to equitable and sustainable development in the region and outlines a plan for deeper regional integration.
The Pacific island region has considerable potential for development, especially in the areas of tourism, fisheries, forestry, mining, and agriculture. However, these countries face many challenges to developing their economies and raising living standards, including their small size, distance from major markets, and vulnerability to natural disasters. The first half of this book provides an assessment of regional issues. The second half includes country-specific chapters, which provide an overview of each countries economic performance since independence and the main challenges ahead.
Robert Mundell's pioneering theory of optimum currency areas is revisited, with experts from the IMF, the BIS, the European Investment Bank, academia, European think tanks, and the Bank of Israel looking at its current practical applications, especially in the context of the forthcoming European Economic and Monetary Union (EMU). Robert Mundell himself offers an update to help in assessing the implications and consequences of EMU.
During his distinguished career at the IMF, Jacques J. Polak served as both Director of Research and, subsequently as a member of the IMF Executive Board. His distinct contribution to the discipline of international financial policy is highlighted in this book edited by Jacob A. Frenkel and Morris Goldstein. The papers included were prepared for a conference, cosponsored by the Netherlands Bank and the IMF, held in Polak's honor in Washington, D.C., in January 1991.
This chapter takes stock of existing efforts at regional financial integration. Integration initiatives have a long history in Latin America; however, many have lost momentum after initial enthusiasm. This chapter looks in particular at two ongoing regional initiatives that—among other objectives—are aiming at financial integration. It finds that prospects are good for both of them, and that they may be the most suitable vehicles for taking the integration process forward at this time.
Many factors indicate that now may be the time for Latin American economies to work toward greater regional financial integration. This would not be a substitute for wider integration in the world economy; some Latin American economies are among the most active in global initiatives. However, given the recent economic slowdown in much of the region, limited progress in pursuing global agreements, and the widespread withdrawal of global financial institutions from emerging markets (including those in Latin America), regional financial integration could help buttress the economies of Latin America, enhance competition, and—over the medium term—lead the way toward global integration.
Market capitalizations in the LA-7 (Brazil, Chile, Colombia, Mexico, Panama, Peru, and Uruguay) are moderate in size by emerging market standards; however, continued growth and development will depend on improving liquidity conditions across the region. At the end of 2015, capitalization of LA-7 equity markets was 32 percent of regional GDP, while the value of domestically traded bonds outstanding was about 62 percent of GDP (Figure 6.1). In dollar terms, the largest bond and equity markets are in Brazil and Mexico. Despite solid market capitalizations, low trading volumes are a growing concern. Shrinking liquidity is attributed to deteriorating macroeconomic conditions, high transaction costs, and the outsized role of institutional investors and their buy-and-hold strategies.