Policy Briefs

L. Bini Smaghi: Reconciling risking sharing with market discipline

The policy paper published by 14 French and German economists in the CEPR Policy Insights series (CPI91) presents a series of proposals to improve the Eurozone financial architecture, with a view to make it less vulnerable to crises and to deliver long term prosperity. CPI91 recognizes that a stronger institutional framework is required for the Eurozone, both for crisis mitigation and crisis prevention. Although reforms need time to be fully implemented, a comprehensive proposal should urgently be agreed, without conditioning measured aimed at risk sharing on progress achieved on risk reduction, or vice versa.

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