BU Now » European Union

Geithner urges global financial reform

Dick Taffe — Thu, 27 May 2010 16:59:56 +0000

Treasury Secretary Timothy Geithner is visiting with his European counterparts to say that the U.S. and Europe broadly agree on the need to reform the financial system but that global cooperation is needed. Law Professor Cornelius Hurley, director of the Morin Center for Banking and Financial Law and a former counsel to the Federal Reserve Board of Governors, says Geithner should be doing less lecturing and more listening in Europe in that the U.S. right now has only a “deeply flawed” legislative proposal to show as its response to the financial crisis.

“The better posture for the U.S. to strike on the international stage would be a willingness to cooperate with ongoing reform initiatives by the G-20, the Financial Stability Board, and others.”

Contact Cornelius Hurley, 617-353-5427, ckhurley@bu.edu

German trading ban roils markets

Dick Taffe — Wed, 19 May 2010 19:29:18 +0000

Because no one followed suit, Germany’s unlateral ban on “naked” short selling of European government bonds - speculative bets that prices will fall on borrowed assets which then can be sold back to the lender with the speculator pocketing the difference –rocked global markets. Mark Williams, who teaches finance at the BU School of Management and is author of “Uncontrolled Risk” about the lessons to be learned from the fall of Lehman Brothers, says this shows that systemic risk remains high in our global financial market.

“Short sellers are a symptom not the cause of our fragile financial system. The action that will be most effective is coordinated efforts by G-20 powers to enact a global financial reform. Efforts being made in the U.S. will not solve the systemic risk that Greece has reminded us still exists.”

Contact Mark Williams, 617-358-2789, williams@bu.edu

Greece’s debt crisis grows

Dick Taffe — Wed, 05 May 2010 20:20:33 +0000

As nationwide workers’ strikes continued and deadly riots erupted in Athens over austerity measures invoked to deal with Greece’s ongoing debt crisis, fears grew that the situation may adversely impact the global banking system. Mark Williams, author of “Uncontrolled Risk” about the fall of Lehman Brothers who teaches finance in the School of Management, says the risk will remain high until meaningful financial reform is enacted globally.

“If the stunning collapse of world markets after the Lehman Brothers bankruptcy in September 2008 was the wakeup call [about uncontrolled risk in the banking system], the unraveling of Greece and potentially other sovereigns (Spain, Portugal, Italy) is the latest alarm bell.”

Contact Mark Williams, 617-358-2789, williams@bu.edu

Crunch time for Greece’s debt woes

Dick Taffe — Wed, 28 Apr 2010 17:48:11 +0000

With Greece’s debt troubles threatening to spread to other indebted European countries and undermine the continent’s economic recover and monetary system, officials are seeking an aid package from EU nations and the International Monetary Fund to stave off disaster. International relations Professor Kevin Gallagher says the “tyranny” of the bond markets is that ratings agencies can trigger default contagion.

“The elephant in the room that needs to be addressed is the role of credit rating agencies in accentuating crises. The IMF and the EU have been getting closer to a deal each day. The rating agencies then come in and downgrade Greek debt to junk and the floor falls out. Reform is urgently needed.”

Contact Kevin Gallagher, 617-353-9348, kpg@bu.edu

Greeks deal with debt

Dick Taffe — Fri, 05 Mar 2010 21:04:23 +0000

Greece has announced austerity measures to rein in the country’s debt that threatens the European Union’s euro currency — and in the process triggered public outrage and demonstrations. International Relations Professor William Keylor, an authority on U.S.-European relations, says the Greek government seems to playing a game of chicken with the EU.

“By hinting that it might approach the International Monetary Fund for an emergency loan, it is threatening the eurozone with a huge embarrassment if it does not come to Greece’s aid. No developed country has gone hat in hand to the IMF since Britain had to do so thirty four years ago.”

Contact William Keylor, 617-358-0197, wrkeylor@bu.edu

Saving Greece’s economy

Dick Taffe — Fri, 26 Feb 2010 16:23:42 +0000

Greece is preparing a bond issue aimed at restructing its economy as the European Union is pushing the country to adopt new austerity measures to cut its crippling budget deficit. Economics Professor Laurence Kotlikoff, as he explains in his blog, says there’s a way in his view for Greece to to devalue without devaluing.

“The government can implement wage and price controls for, say, the next three months, with these controls covering not just the growth in wages and prices over the next three months, but also their initial levels … [then] the German and French governments could commit to servicing some fraction (say 30 percent) of Greece’s current public and private external debt with the understanding that this servicing ceases if Greece misses it’s spending and tax rate targets.”

Contact Laurence Kotlikoff, 617-353-4002, kotlikoff@bu.edu

EU seeks Greece economic rescue

Dick Taffe — Wed, 10 Feb 2010 17:23:55 +0000

European Union governments are grappling how to manage the debt crisis in Greece that threatens to undermine the shared euro currency. Economics Professor Laurence Kotlikoff, who a decade ago in Foreign Affairs magazine predicted the euro’s collapse, says Greece’s debt woes are a precursor to what may happen in the U.S.

“Greece is where the United States is heading. Indeed, there is strong reason to believe that the U.S. is in much worse fiscal shape than is Greece.”

Contact Laurence Kotlikoff, 617-353-4002, kotlikoff@bu.edu

EU ends Microsoft antitrust case

Dick Taffe — Wed, 16 Dec 2009 20:18:17 +0000

After Microsoft agreed to market its rival’s browsers alongside its own Internet Explorer, the European Commission settled its last antitrust issues with the software giant. Law Professor Keith Hylton says the deal makes sense to both Microsoft and the European regulators, but he sees a problem looming.

“This settlement may encourage even more aggressive theories of monopolization against Microsoft and other big firms to be brought before the European Commission. It could be viewed by some rivals as an invitation to bring their business grievances to the EC.”

Contact Keith Hylton, 617-353-8959, knhylton@bu.edu

EU and Jerusalem

Dick Taffe — Tue, 01 Dec 2009 21:28:13 +0000

A European Union initiative, to be considered next week, would carve off east Jerusalem as the capital if an independent Palestinian state. Israel rejects the concept. Journalism Professor Bob Zelnick, a former ABC News Middle East correspondent and author of “Israeli Unilateralism: Beyond Gaza,” says the Israel, the Palestinians, and the U.S. all have missed recent chances to make peace in the region.

“We have here a situation where brains and judgment appear to have recused themselves from the peace process.”

Contact Bob Zelnick, 617-353-5007, bzelnick@bu.edu

Senators push EU on antitrust case

Dick Taffe — Wed, 25 Nov 2009 19:30:01 +0000

Led by John Kerry and Orrin Hatch, 59 U.S. senators are urging European antitrust regulators to make a decision on the proposed Oracle merger with Sun Microsystems. Law Professor Keith Hylton, an antitrust law expert, says the intervention reflects a disproportionate political influence by Sun relative to its importance to the economy.

“This sort of intervention by members of Congress is overdue. There should have been a frank dialogue about competition policy differences several months (or maybe years) ago.”

Contact Keith Hylton, 617-353-8959, knhylton@bu.edu