Edited by Thorsten Beck - Vox

Foreword
During the three years that have elapsed since the collapse of Lehman Brothers in
2008 – an event which heralded the most serious global financial crisis since the 1930s
– CEPR’s policy portal Vox, under the editorial guidance of Richard Baldwin, has
produced 15 books on crisis-related issues written by world-leading economists and
specialists. The books have been designed to shed light on the problems related to
the crisis and to provide expert advice and guidance for policy makers on potential
solutions.
The Vox books are produced rapidly and are timed to ‘catch the wave’ as the issue under
discussion reaches its high point of debate amongst world leaders and decision makers.
The topic of this book is no exception to that pattern. European leaders are gathering
this weekend in Brussels to search for a solution to the Eurozone debt crisis – proposals
for the recapitalisation of Europe’s banks are high on the agenda.
Whilst many people were of the opinion that the banking crisis was more or less resolved
two years ago and that the more pressing issue to tackle was the emerging sovereign
debt crisis and the risk of contagion, the full extent to which sovereign risk and banking
risk are in reality so dangerously intertwined has become increasingly clear – no big
European bank is now safe from the potential impact of holding bad government debt.
This Vox book presents a collection of essays by leading European and US economists
that offer solutions to the crisis and proposals for medium- to long-term reforms to the
regulatory framework in which financial institutions operate. Amongst other proposals,
the authors present the case for a forceful resolution of the Eurozone crisis through the
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