Insolvency Protection and Fairness for Greece: Implementing the Raffer Proposal Kunibert Raffer

The financial crisis in Greece and the 'austerity measures' being imposed on the country has lead to disastrous results for the economy. Contrary to mainstream prescriptions that seek to bailout big financial institutions at the expense of the real economy, an alternative proposal that was originally proposed by the author has gained much credence. The ''Raffer Proposal'' (also known as the Fair Transparent Arbitration Procedure (FTAP)) has been endorsed and propagated by many noteworthy economists, NGOs, and the Jubilee Movement. This article espouses the basic tenets of the Proposal and explains how it can help resolve the Greek crisis. Implementing_Raffer_Proposal (Download…

Insolvency Protection and Fairness for Greece: Implementing the Raffer Proposal Kunibert Raffer

The financial crisis in Greece and the ‘austerity measures’ being imposed on the country has lead to disastrous results for the economy. Contrary to mainstream prescriptions that seek to bailout big financial institutions at the expense of the real economy, an alternative proposal that was originally proposed by the author has gained much credence. The “Raffer Proposal” (also known as the Fair Transparent Arbitration Procedure (FTAP)) has been endorsed and propagated by many noteworthy economists, NGOs, and the Jubilee Movement. This article espouses the basic tenets of the Proposal and explains how it can help resolve the Greek crisis. Insolvency_Protection…

Society, Economic Policies, and the Financial Sector Y.V. Reddy

This is the Per Jacobsson Foundation Lecture 2012 delivered by the author at Basel, Switzerland. It is argued that the biggest challenge for the future of finance lies in designing governance practices that avoid the dangers of comprehensive regulatory capture. Approaches to regulation of the financial sector should continue to be national since the global environment is not necessarily favourable. In this regard, consideration of regulation, competition and ownership in the financial sector in an integrated manner, enhanced monitoring of financial market activities and the use of fiscal tools to supplement regulation could be helpful. Financial_Sector (Download the full text…

Using Minsky to Simplify Financial Regulation

The basic error in the current regulatory approach embodied in Dodd-Frank is that it does very little to limit the creation of fictitious liquidity or to redirect the creation of that liquidity for financing capital development of the system. A more expeditious method of reform that could replace Dodd-Frank would be to ask if there were any reason why the fictitious-liquidity structures that have grown up in the process of deregulation are necessary for the operation of the economy. using_minsky (Download the full text in PDF format)

Monetary Policy and Central Banking after the Crisis: The implications of rethinking macroeconomic theory Thomas I. Palley

In this paper, the author presents an outsider reform program that focuses on central bank governance and independence; reshaping the economic philosophy of central banks to be more intellectually open-minded; major monetary policy reform that includes adoption of an inflation target equal to the minimum unemployment rate of inflation (MURI) and implementation of asset based reserve requirements; and regulatory reform that addresses problems of flawed incentives, excessive leverage, and maturity mismatch. imk (Download the full text in PDF format)

New Issue Newsletter on EU Financial Reform

The financial costs of resolving the financial crisis that erupted in September 2008 are now taking a heavy toll on the economy, democracy and society of Greece, Ireland, Portugal and many other economies. It is time that decision makers and the financial sector change their old ways of acting and thinking before the crisis gets completely out of hand. The new issue of the newsletter EU Financial Reform, edited by SOMO and WEED, is online. You can view and download it as PDF-document at the WEED homepage: eu_financial (Download the full text in PDF format)

The Great Austerity War: What caused the deficit crisis and who should pay for it? James Crotty

The author argues that the recent deficit crisis in USA is the result of a shift from the New-Deal-based economic model of the early post-war period to today's neoliberal, free-market model, a shift initiated under Ronald Reagan and continued under the presidents who succeeded him. The new model has generated slow growth, rising inequality and rising deficits. Rising deficits in turn created demands for austerity. This crisis can be resolved by raising taxes on upper-income households and large corporations, cutting war spending, and adopting a Canadian or European style health care system and there is no need to accept austerity…