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 architecture in particular. This paper combines insights from the emerging research strand of (critical) macro-finance and develops an institutionalist, inductive model of the Eurozone architecture to remedy those conceptual shortcomings. It proposes to imagine a monetary architecture as a hierarchical web of interlocking balance sheets comprised of three elements —institutions, instruments and elasticity space—that are located in four different segments of central banks, commercial banks, non-bank financial institutions and fiscal authorities, including treasuries and off-balance sheet fiscal agencies. Using a systemic approach on global finance, the paper sees the Eurozone as a monetary jurisdiction embedded in the first-layer periphery of the global Offshore US-Dollar System. It has multiple cross-connections with the US monetary jurisdiction, which is located at the apex of that system, and incorporates offshore US-Dollar creation and shadow banking activities.
‘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 […]
‘Rethinking Monetary Sovereignty. The Global Credit Money System and the State’ (with Jens van ‘t Klooster)
This article proposes a conception of monetary sovereignty that recognizes the reality of today’s global credit money system. Monetary sovereignty is typically used in a ‘Westphalian’ sense that simply denotes the ability of states to […]
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. […]