Dr. Steffen Murau| steffenmurau.com

2016 | ‘European Monetary Integration and the Public-Private Money Divide. Can Post-Crisis Reforms Harmonize Private Money Creation in the Eurozone?’

Based on the conceptual framework of the ‘Money View’, this paper argues that European monetary integration until the Eurocrisis only focused on harmonizing public money on a supranational level while neglecting private credit money creation. The privately issued credit money supply in the European Monetary Union (EMU) is made up of both bank deposits and ‘shadow money’ forms (e.g. money market fund shares and repurchase agreements). The paper discusses if the institutional evolution and the political reform projects after the crisis have led to an upload of the frameworks for private credit money creation on a European level. On the one hand, the paper takes into account the ECB’s role in compensating the unwillingness of European banks to continue intra-EMU cross-border lending by tolerating and supporting TARGET 2 balances. On the other the hand, it addresses the Banking Union reforms. The paper finds that with regard to bank deposits as ‘traditional’ private credit money, a spill-over is taking place that by and large leads to monetary integration further down the monetary hierarchy and seems to establish the public-private partnership for deposit creation on a European level. Finally, the paper defines an avenue for further research on the creation and regulation of shadow money in the EMU.

Presented at the 3rd Workshop in International Studies of the European International Studies Association (EISA), Tübingen (04/2016)

Related articles

2020 | ‘Towards a Macro-financial Model of the Eurozone Architecture’

It is a convention to say that Eurozone architecture is ill-constructed and deficient. However, there is neither a comprehensive theoretical definition of monetary architecture in general, nor is there a precise definition of the Eurozone […]

Learn More

2020 | ‘Financial Globalization as Positive Integration. Monetary Technocrats and the Eurodollar Market in the 1970s’ (with Benjamin Braun and Arie Krampf), Review of International Political Economy

International political economy (IPE) has explained financial globalization as the result of states deciding to open up and liberalize domestic financial systems. Complementing this ‘negative integration’ view, we present a theory of financial globalization during […]

Learn More

‘Quantitative Easing, Central Bank Independence and the Seeming Fundamental Difference between Monetary and Fiscal Policy’ (with Tobias Pforr)

Quantitative Easing (QE) has become the main new central banking activity after the 2007-9 Financial Crisis. Conventionally referred to as an ‘unconventional monetary policy’, the Federal Reserve has recently called it the ‘new normal’ of […]

Learn More

Leave a Reply

Your email address will not be published. Required fields are marked *