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The Financial Turmoil and EU Policy Co-operation in 2008

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  • LUCIA QUAGLIA
  • ROBERT EASTWOOD
  • PETER HOLMES

Abstract

This article analyses the response of the European Union (EU) to the financial crisis in 2008 under the headings of liquidity, recapitalization and ownership of banks, macroeconomic policies and regulatory policy. It is argued that although at the onset of the crisis governments tended to focus on national-level responses, they quickly realized that international co-ordination would be required. This proved difficult to achieve in many areas, although monetary policy was an exception. Here co-ordination was rapid, not only in the euro area but also between the European Central Bank and other EU national central banks. Even so, within the euro area, the lender of last resort function was carried out by national central banks. Fiscal policy and bank recapitalization were similar across countries, but independently agreed. Competition rules were the one supranational EU regime, but did not act as a significant constraint on Member States. Copyright (c) 2009 The Author(s). Journal compilation (c) 2009 Blackwell Publishing Ltd.

Suggested Citation

  • Lucia Quaglia & Robert Eastwood & Peter Holmes, 2009. "The Financial Turmoil and EU Policy Co-operation in 2008," Journal of Common Market Studies, Wiley Blackwell, vol. 47, pages 63-87, September.
    • Handle: RePEc:bla:jcmkts:v:47:y:2009:i::p:63-87
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    References listed on IDEAS

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    1. Dirk Schoenmaker & Sander Oosterloo, 2005. "Financial Supervision in an Integrating Europe: Measuring Cross-Border Externalities," International Finance, Wiley Blackwell, vol. 8(1), pages 1-27, July.
    2. International Monetary Fund, 2006. "Euro Area Policies: Selected Issues," IMF Staff Country Reports 2006/288, International Monetary Fund.
    3. Maria J. Nieto & Garry J. Schinasi, 2008. "Towards an EU Framework for Safeguarding Financial Stability," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 6(03), pages 27-36, October.
    4. Ms. María Nieto & Mr. Garry J. Schinasi, 2007. "EU Framework for Safeguarding Financial Stability: Towards an Analytical Benchmark for Assessing its Effectiveness," IMF Working Papers 2007/260, International Monetary Fund.
    5. repec:ces:ifodic:v:6:y:2008:i:3:p:14567250 is not listed on IDEAS
    6. Louis W. Pauly, 2008. "Financial Crisis Management in Europe and Beyond," Contributions to Political Economy, Cambridge Political Economy Society, vol. 27(1), pages 73-89.
    7. Maria J. Nieto & Garry J. Schinasi, 2008. "Towards an EU Framework for Safeguarding Financial Stability," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 6(3), pages 27-36, October.
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    Cited by:

    1. Lucia Quaglia, 2009. "The 'British Plan' as a Pace-Setter: The Europeanization of Banking Rescue Plans in the EU?," Journal of Common Market Studies, Wiley Blackwell, vol. 47, pages 1063-1083, November.
    2. Amy Verdun, 2009. "Economic Developments in the Euro Area," Journal of Common Market Studies, Wiley Blackwell, vol. 47(s1), pages 233-257, September.
    3. Duarte Santos, António & Ribeiro, Sandra & Castela, Guilherme & Tavares Da Silva, Nelson, 2017. "The Dynamics between Economic Growth and Living Standards in EU Countries: A STATICO Approach for the Period 2006-2014/La dinámica entre el crecimiento económico y la calidad de vida en los países de ," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 35, pages 629-652, Agosto.
    4. Dermot Hodson & Lucia Quaglia, 2009. "European Perspectives on the Global Financial Crisis: Introduction," Journal of Common Market Studies, Wiley Blackwell, vol. 47(5), pages 939-953, November.
    5. Kowalski, Tadeusz & Shachmurove, Yochanan, 2014. "The reaction of the U.S. and the European Monetary Union to recent global financial crises," Global Finance Journal, Elsevier, vol. 25(1), pages 27-47.
    6. Nedelchev, Miroslav, 2015. "Coordination of banking regulation in the EU," MPRA Paper 66073, University Library of Munich, Germany, revised 2015.
    7. Bigerna, Simona & Bollino, Carlo Andrea & Micheli, Silvia, 2016. "Renewable energy scenarios for costs reductions in the European Union," Renewable Energy, Elsevier, vol. 96(PA), pages 80-90.
    8. David Howarth & Lucia Quaglia, 2013. "Banking Union as Holy Grail: Rebuilding the Single Market in Financial Services, Stabilizing Europe's Banks and ‘Completing’ Economic and Monetary Union," Journal of Common Market Studies, Wiley Blackwell, vol. 51, pages 103-123, September.
    9. Dermot Hodson & Lucia Quaglia, 2009. "European Perspectives on the Global Financial Crisis: Introduction," Journal of Common Market Studies, Wiley Blackwell, vol. 47, pages 939-953, November.
    10. Amy Verdun, 2009. "Economic Developments in the Euro Area," Journal of Common Market Studies, Wiley Blackwell, vol. 47, pages 233-257, September.
    11. James Buckley & David Howarth, 2010. "Internal Market: Gesture Politics? Explaining the EU's Response to the Financial Crisis," Journal of Common Market Studies, Wiley Blackwell, vol. 48(s1), pages 119-141, September.
    12. Salines, Marion & Glöckler, Gabriel & Truchlewski, Zbigniew & del Favero, Paola, 2011. "Beyond the economics of the euro - analysing the institutional evolution of EMU 1999-2010, September 2011," Occasional Paper Series 127, European Central Bank.
    13. Lucia Quaglia, 2009. "The ‘British Plan’ as a Pace‐Setter: The Europeanization of Banking Rescue Plans in the EU?," Journal of Common Market Studies, Wiley Blackwell, vol. 47(5), pages 1063-1083, November.
    14. Salines, Marion & Glöckler, Gabriel & Truchlewski, Zbigniew & del Favero, Paola, 2011. "Beyond the economics of the euro - analysing the institutional evolution of EMU 1999-2010," Occasional Paper Series 127, European Central Bank.
    15. Dermot Hodson, 2010. "The EU Economy: The Euro Area in 2009," Journal of Common Market Studies, Wiley Blackwell, vol. 48(s1), pages 225-242, September.
    16. Bengtsson, Elias, 2013. "Shadow banking and financial stability: European money market funds in the global financial crisis," Journal of International Money and Finance, Elsevier, vol. 32(C), pages 579-594.

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