Clark Center Forum

For more than a decade, the European Union’s policymakers have been aiming to create a deeper pan-European capital market. In recent years, those efforts have acquired more urgency. As the think tank Bruegel recently set out: Initially, the focus was on integrating and developing national capital markets to complement bank lending and enhance risk diversification, […] 

 

This European survey examines (a) Creating a ‘28th regime’ - an optional, EU-wide code of corporate, securities and insolvency law that firms could adopt and which would pre-empt the application of any of the 27 national rulebooks - would be substantially more effective in building a European capital market than continuing efforts to achieve harmonisation of the national rulebooks; (b) Creating the 28th regime would substantially increase the supply of capital to new ventures and growing businesses; (c) A well-functioning and efficient single EU capital market requires a strengthened European Securities and Markets Authority, comparable to the US Securities and Exchange Commission, to operate as a single market regulator 

Two weeks ago, on the evening of May 16th, Moody’s (one of the three credit rating agencies) downgraded the sovereign debt of the United States. The credit rating was trimmed back from the top Aaa to Aa1, one notch below. Moody’s reasoning, which they set out at length, was relatively straightforward: for more than a […] 

This US survey examines (a) Long-run US fiscal sustainability will require some combination of slowing the growth of spending on Medicare, Medicaid and Social Security benefits and/or tax increases, including higher taxes on households with incomes below $400,000; (b) Issuing an additional $2.3 trillion of debt over the next 10 years, as is projected by the Congressional Budget Office if the House Reconciliation Bill is enacted, will substantially raise interest rates on government debt over that period 

The Network of Central Banks and Supervisors for Greening the Financial System (NGFS), a grouping of central banks and financial regulators, was formed in 2017 and now boasts more than 60 members ranging from large global players such as the European Central Bank, the People’s Bank of China, and the Bank of Japan to relative […] 

Despite some recent falls, European electricity remains expensive, both compared to recent history and to the process available in other large economies. According to the International Energy Agency, electricity prices fell relatively quickly in most major markets in 2024, and yet, outside of the United States, remain elevated: Wholesale electricity prices declined further in many […] 

This Finance survey examines (a) Under current policies on climate change, the associated physical risks (such as those arising from total seasonal rainfall and sea level changes, and increased frequency, severity, and correlation of extreme weather events) will be at most a very small factor in monetary policy decisions over the next decade; (b) The physical risks associated with climate change under current policies are likely to threaten financial stability over the next decade 

This European survey examines (a) The high cost of electricity for industrial users in the European Union relative to other big economies is a substantial constraint on growth; (b) Problems with the intermittency of renewable energy sources mean that over the next five years, electricity prices are more likely to rise than fall; (c) Substantial European investment in electricity infrastructure is essential to address high prices and unreliable supply 

This US survey examines (a) A sustained decline in the dollar's market share in the global economy will mean that US consumers are substantially worse off than they otherwise would be; (b) A permanently weaker dollar would substantially raise the US government's cost of financing its deficits