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Action Policy Digest June 2020

Author:

Date: 8 June 2020

Type: Other

Topic: Action Institute

Organized as a monthly newsletter, it presents an overview of the current international policy debate. You find below a selection of the best ideas from the most influential think tanks, structured in four areas: (i) Finance, (ii) Innovation and Development, (iii) European Affairs and (iv) Social Policy.
FINANCE

The European Union’s post-Brexit reckoning with financial markets. In the negotiations between the European Union and the United Kingdom over their future relationship, we see a high probability of a weak contractual outcome, given the dominance of politics over considerations of market efficiency.

Regulatory arbitrage and the G20’s global derivatives market reform. Managing global financial risks requires coordinated policies and a firm commitment by national actors. In the absence of such commitment, risks are reallocated and concentrate where they are least effectively addressed.

The European Central Bank in the COVID-19 crisis: whatever it takes, within its mandate. To keep the euro-area economy afloat, the European Central Bank has put in place a large number of measures since the beginning of the COVID-19 crisis. This response has triggered fears of a future increase in inflation.

INNOVATION AND DEVELOPMENT

Machine learning against accounting fraud. Detecting and preventing accounting fraud is a concern for many policymakers around the world. This column presents a framework that incorporates machine learning techniques to detect and forecast fraudulent behaviour by firms when reporting financial information.

 

EUROPEAN AFFAIRS

What’s the ECB doing in response to the COVID-19 crisis?“. The European Central Bank (ECB) is the analog to the Federal Reserve for the euro area, namely the 19 European nations that share a common currency, the euro. Its primary mandate, set by treaty, is to maintain price stability. It also supervises 115 major banks in the eurozone, which account for more than 80% of all banking assets.

An equity fund for a zombie-free and EU-wide recovery. Four guiding principles can help ensure a well designed EU equity fund.

CERThe EU Recovery Fund is a historic step, almost. The €500bn EU recovery fund proposed by Angela Merkel, the German chancellor, and Emmanuel Macron, the French president, could be a historic step forward for the EU.

Europe in the time of Covid-19: A new crash test and a new opportunity. After a period of hesitation, governments in Europe have reacted forcefully to the COVID-19 pandemic with various strategies combining social distancing, testing/quarantining, and lockdowns. During a pandemic, however, coordination is key and repairing corporate balance sheet and the single market, as well as economic recovery constitute common goods.

SOCIAL POLICY

Risking their health to pay the bills: 100 million Europeans cannot afford two months without income. Nearly 100 million people in 21 EU countries do not have enough savings in their bank accounts to meet two months of basic expenses: food, utilities, rent or mortgage. Those born outside the EU are especially at risk. Government support is thus fundamental to help individuals withstand the COVID-19 crisis.

Credit

Let me remind you that credit is the lifeblood of business, the lifeblood of prices and jobs.

Herbert Hoover

Health

Good health is essential to social and economical development and it empowers all of the public sectors.

World Health Organization

Innovation

Innovation is the specific instrument of entrepreneurship. The act that endows resources with a new capacity to create wealth.

Peter Drucker

Human Capital

Talent is a source from which water flows constantly renewed. But this source loses its value unless it is properly used.

Ludwig Wittgenstein