Topics:

1. My TV Interviews

2. My Press Articles about the Financial Crisis

3. Corporate Governance and the Banking Crisis

4. The Dollar’s Long-Run Value

5. Evidence that the Tobin Tax is Counterproductive

1. My TV Interviews (in German)

Das Erste, Monitor, November 3, 2011 (in German):
Mogelpackung: Der Hebel des Euro-Rettungsfonds

Das Erste, Plusminus, November 1, 2011 (in German):
Euro-Rettungsschirm: Wer wird geschützt?

Presentation on the EFSF before Members of the German Bundestag, October 26, 2011 (in German):
Der Riskante Griff nach dem Hebel

2. My Press Articles about to the Financial Crisis

Schritt für Schritt ... dem Abgrund entgegen!, Ifo Schnelldienst, Vol. 64(22), Nov. 2011

Der Riskante Griff nach dem Hebel, Frankfurter Allgemeine Zeitung, Oct. 24, 2011

Europäische Banken notfalls zwingen, Luxemburger Wort, Oct 1, 2011

Un cadeau de 200 milliards d'euros pour les riches, Le Temps, Sept. 24, 2011

Die Alternative zum Rettungsschirm, Frankfurter Allgemeine Zeitung, Sept. 16, 2011

Die Garantie aller Staatsschulden erweist sich als Illusion, Handelsblatt, Sept., 5, 2011

Bank recapitalization is the best euro rescue strategy, voxeu.org, September 2, 2011

Beitrag privater Gläubiger entpuppt sich als Farce, Fuldaer Zeitung, August 23, 2011

Une Europe qu fait cadeau de 200 milliards à ses riches, Le Monde, August 15, 2011

200-Milliarden-Geschenk für Europas Reiche, Süddeutsche Zeitung, August 8, 2011

Europe's €200 billion reverse wealth tax explained, voxeu.org, July 27, 2011

Understanding and quantifying contagion, voxeu.org, February 5, 2011

Europäische Lehren aus dem Fall Griechenland, Berlin Risk Brief No. 6, Oktober 2010

Triumph des Börsenmarktes, Süddeutsche Zeitung, p. 18, May 25, 2010

Securitisation failings: Market failure or missing markets, voxeu.org, April 17, 2010

Board (In)Competence and the Subprime Crisis, voxeu.org, January 12, 2009

Legenden um die Krise, Handelsblatt, April 8, 2009.

Une crise des banques, pas des marchés, Les Echos, April 15, 2009.

Der Rat der Circe, Handelsblatt, November 18, 2008.

3. Corporate Governance and the Banking Crisis

Bank Governance and the Crisis: Did board (in)competence matter for bank performance during the recent crisis
with Johannes Steinbrecher and Marcel Thum, TU Dresden
The European Financial Review, 38-41, February-March 2011

Subprime Crisis and Board (In-)Competence: Private vs. Public Banks in Germany
with Marcel Thum, TU Dresden
Economic Policy, Vol. 24(60), 701-751, October 2009

Summary: We examine evidence for a systematic underperformance of state-owned banks in the current financial crisis and study if the bank losses can be traced to the quality of bank governance. For this purpose, we examine the biographical background of 593 supervisory board members of Germany’s leading banks and find a pronounced difference in the finance and management experience of board representatives across private and state-owned banks. Measures of “Boardroom Competence” are then related directly to the magnitude of bank losses in the recent subprime crisis. Our data confirms that supervisory board (in-)competence in finance is related to losses in the financial crisis. Improved bank governance is therefore a suitable policy objective to reduce bank fragility.

Excel spreadsheets with data used in the analysis
Excel spreadsheets with data in figures

Use of this data requires that proper reference is provided.

A summary is also available on INSEAD knowledge as well as a short interview. See also the Harvard Law School Forum on Governance and Financial Regulation.

Wie (in-)kompetent sind die Aufsichtsräte deutscher Banken?
mit Marcel Thum, TU Dresden
Press Release - IFO Schnelldienst (in German)

Zusammenfassung: Eine Auswertung der Lebensläufe von 426 Aufsichtsratsmitgliedern in den 29 größten deutschen Banken zeigt, dass Finanzmarkt- und Bankerfahrung von Aufsichtsratsmitgliedern besonders in den öffentlich-rechtlichen Banken die Ausnahme und nicht die Regel sind. Vor dem Hintergrund der besonders hohen Verluste der staatlichen Landesbanken ist eine grundsätzliche Restrukturierung des öffentlichen Bankensektors erforderlich. Die Forderung nach zusätzlicher Bankenreglementierung erscheinen weitgehend irrelevant, solange die bestehenden Aufsichtsratsstrukturen einer hinreichenden Kontrollkompetenz entbehren.

Interview about role of bank governance on YouTube.

4. The Dollar's Long-Run Value

International portfolio investment under the microscope
with Helene Rey

Summary: The sustainability of the US current account depends on foreigners’ willingness to holding US assets. This column discusses new micro-econometric evidence that equity funds rebalance in reaction to increased exchange rate risk. In short, there is a limit to foreigners’ holding of US assets; the US will either have to run a trade surplus in the future, or the dollar must fall to deflate the value of foreigner’s holdings.

4. Evidence that a Tobin Tax is Counterproductive

An independent referee summarized my article on the Tobin Tax:
Comments on “Estimating the Volatility Effect of a Tobin Tax”

The full scientific article can be downloaded here:
The Role of Transaction Costs for Financial Volatility: Evidence from the Paris Bourse
Journal of the European Economic Association, MIT Press, Vol. 4(4) (2006), 862-890

Abstract: The paper analyzes the causal linkage between transaction costs and financial volatility under two methodological improvements over the existing literature. First, we use panel data in which exogenous transaction cost differences in the French stock market are induced by price level dependent minimum price variation rules (tick size rules). Unlike in previous studies based on one-time regulatory tick size changes (like the U.S. decimalization), we can separately identify and control for market-wide volatility changes. Second, we avoid the pitfalls of biased volatility measurement across regimes by using the range as a tick size robust volatility metric. Panel regressions controlling for market-wide volatility effects show at high levels of statistical significance that the (log) range volatility of individual stocks increases by more than 20 percent for a 20 percent exogenous increase in transaction costs due to tick size variations in the French trading system. In the light of this evidence, higher transaction costs in general, and security transaction taxes in particular, should be considered as volatility increasing.