Documents Howarth, David 5 results

"This article explores what the financial crisis shows about changes in the German and French banking systems, the two largest in continental Europe. In particular, we highlight processes of financialization – defined here as the increased trading of risk. We focus on an apparent contradiction: why did the supposedly more protectionist and conservative German banking system suffer much higher losses than the more liberalized French system? This article also examines the responses of German and French banks and governments to the crisis and speculates how far these responses might limit future financialization and shape national banking systems."

"Our study seeks to put the assumptions of German Stability Culture to the test. The concept is a core legitimizing element of economic policy discourse in Germany and used regularly to juxtapose Germany and northern Europe and the euro area periphery. Using Eurobarometer surveys we construct a measurement for Stability Culture which is based on the priority assigned to the fight against inflation. Our empirical analysis covers the 2002–2010 timespan and includes 27 European Union Member States. Our results show that the distinction between northern states with an allegedly strong and southern states with an allegedly weak Stability Culture is a myth. Controlling for actual inflation, we find that the northern Member States with an allegedly high Stability Culture are less concerned with price stability than the rest of the EU."

"This contribution discusses the two main asymmetries of European Economic and Monetary Union (EMU) as they developed over the past two decades since the launch of the Single Currency. From the outset, EMU involved asymmetric degrees of integration in the area of ‘economic' union (less centralised governance) versus ‘monetary' union (more supranational governance). With the outbreak of the Sovereign Debt Crisis in 2010, the regime-shaping relevance of a second asymmetry emerged: one roughly between the member states of the Euro Area ‘core' and those in the ‘periphery'. Each of the two asymmetries have created a range of challenges — institutional, policy and political — that undermine the stability and sustainability of the EMU project."

"In May 2020, a ruling of the German Federal Constitutional Court (FCC) questioned the legality of the Bundesbank's participation in the European Central Bank's (ECB's) Public Sector Purchase Programme. Applying elements of a principal-agent analysis, this article analyses how the FCC ruling presents us with a new understanding of the relationship between the ECB, other EU institutions and Eurozone member states. Existing principal-agent analyses of the ECB focus upon its relations with other EU-level institutions and point to the limited ex ante control mechanisms and efforts to reinforce ex post control mechanisms—notably European Parliament oversight. The FCC ruling and the ECB's reaction demonstrate the relative importance of national level controls over the ECB agent. This article understands the role of private plaintiffs in Germany as a form of ‘fire alarm' on ECB policymaking against the background of weak ex post controls at the EU-level."

"The problem of banks being 'too big to fail' was the defining regulatory issue of the global financial crisis. However, attempts to tackle the problem by separating retail banking from higher risk trading activities - known as structural reform - proved to be highly divisive and contributed to significant regulatory divergence. In this book, David Howarth and Scott James explain this variation by examining the politics of bank structural reform across six key jurisdictions: the United States, the European Union, the United Kingdom, France, Germany, and the Netherlands. Integrating political economy and public policy approaches, they develop a novel 'comparative financial power' framework to analyse how financial industry influence is mediated by two factors: first, whether bank lobbying is unified and centralized (cooperative financial power) or divided and fragmented (competitive financial power); and second, policy makers' use of venue shifting to depoliticize contentious policy issues.

The book explains that the US and UK governments implemented major reforms because the banking industry was divided and faced significant opposition. However, venue shifting to an independent committee led to durable reform in the UK, while political polarization in the US contributed to contested reform. By contrast, the French and German governments balanced unified bank lobbying and political pressures to act by pursuing limited symbolic reforms; the Dutch government deflected the issue through delegation to multiple commissions (no reform); while political stalemate at the EU level resulted from early venue shifting and concerted pan-European bank lobbying. The book makes a major contribution to scholarship on the political economy of finance and business power."