Capital Markets Union
Capital Markets Union

Banks remain essential Arrow

The European Commission wants to reform the European financing environment fundamentally. Similar to the situation in the US, capital markets are supposed to increase funding. Recently, the public Capital Markets Union’s consultation ended. The German Institute for Economic Research participated in the consultation, promoting financing through banks and criticizing the Commission’s ambitious schedule. more

EU Investment Plan
EU Investment Plan

Arguments don’t count Arrow

The global financial and economic crisis has starkly unsettled private investors. An investment plan, recently initiated by the President of the EU Commission Jean-Claude Juncker, is supposed to retrieve private investors back into the market. The investment plan will be carried out by European institutions partially taking over private risks. However, the Commission's proposal is based on an inaccurate economic reasoning. more

Digitisation
Digitisation

Lock Bank services are going online Arrow

Digital technologies are not only used by banks, but also by new players in the industry, known as fintechs. With their new financial technologies, customers are able to pay by smartphone, for example. Many Germans, however, have remained sceptical when it comes to using these new technologies. more

Digital Single Market
Digital Single Market

Nothing ventured, nothing changed Arrow

Europe needs the Digital Single Market: Digitization is spreading quickly and influences companies radically. Regulation, however, so far does not keep pace. There are still a lot of grey areas, national frameworks and cross-border digital services are often incompatible. Now, the European Commission strives to change that with its strategy for the Digital Single Market. Unfortunately, it is very general, albeit ambitious time-wise. more

Sovereign Debt Crisis
Sovereign Debt Crisis

Bond purchases only effective together with reforms Arrow

The European Central Bank (ECB) purchases public sector bonds until September 2016 in the amount of monthly 60 Billion Euros. This financial large-scale project will only be effective in the long-run, if conducted together with sustainable supply-side reforms in the Eurozone countries. The ECB should demand these reforms as often as possible. more

Watch out: Global Low Interest Rate Trap!
Central Banks

Watch out: Global Low Interest Rate Trap! Arrow

The US central bank Federal Reserve has disenchanted financial markets. Market participants had expected that the “Fed” will hike its policy instrument, the federal funds rate target. The Fed, however, abstained from such a policy move, since Fed-chairwomen Janet Yellen intends to further stimulate the economy with low interest rates – as the Fed said. The strong US-Dollar, on the contrary, could be another reason for the delayed hike. As of now, the threat of a global low interest rate trap is present. more

Unemployment in the EU
Unemployment

Lock In the job market, women are winning Arrow

Good news has been hard to find in the European labour market over the past few years. Women, however, have had reason to celebrate: When it comes to employment, they have outperformed men. more

IW Crisis Monitor
IW Crisis Monitor

The “crisis countries” are on the right path Arrow

Although the euro zone’s debt crisis is far from over, the situation is unlikely to worsen dramatically. As the latest IW Crisis Monitor shows, all of the “crisis countries” are on the right path – except for Cyprus. more

Banking regulation
Banking regulation

Disadvantages for corporate credit should be removed Arrow

The president of the Supervisory Council at the European Central Bank (ECB), Danièle Nouy, calls for capital adequacy requirements for sovereign bonds. Moreover, she demands an upper limit for these investments. Both reforms were already proposed in recent studies from the Cologne Institute for Economic Research (IW). Privileging sovereign debt by regulation, indeed, disadvantages the credit supply to non-financial firms and enhances financial market risks. more