21 May 2018

フィナンシャル・タイムズ紙：銀行同盟の要となる欧州安全資産

Less than four months ago, the European Systemic Risk Board — the bloc’s authority responsible for monitoring and preventing dangers to the financial system — recommended the creation of synthetic securities by pooling, packaging and tranching sovereign bonds from all members of the single currency. This would create a “safe asset” that could stabilise financial markets in a panic and prevent the sort of capital flight from vulnerable countries that put the euro’s integrity at risk in the previous crisis.

The proposal would crucially eschew any sort of joint liability between eurozone sovereigns. Instead, senior and junior tranches of the security would be issued in such proportions that the senior bond would be rated as safe as the debt of the most creditworthy sovereigns. Any default risk would be absorbed by junior securities marketed to investors with tolerance for risk who are seeking higher yields.

Had such instruments existed during the eurozone debt crisis, they would have helped neutralise the most noxious market dynamics. Vulnerable governments may not have been locked out of markets altogether and banks would not have been as exposed to the public finance problems of states.

Yet barely had the draft leaked out — the commission is to make its proposal public this week — than protests were voiced in Germany. Leading figures have branded the safe asset idea as a way to bring in “through the back door” mutualised “eurobonds” which would make German taxpayers guarantee the debts of other states. Others argued that financial engineering cannot create safety out of fundamentally unsafe underlying bonds.

It is not surprising that instant reactions are negative. Politically, the proposal’s timing is awkward, to say the least, coinciding with the formation of an Italian governing coalition whose partners are challenging EU fiscal rules and have openly flirted with monetising public debt.

The critics are nonetheless wrong. There is no sense in which the safe asset proposal puts German taxpayers, say, on the hook for Italian public debt. On the contrary, having a pan-eurozone asset without joint liability would take away pressure for one that does involve such mutual support. If it does what it is designed to do, it will demonstrate that eurozone financial stability can be buttressed without a fiscal union. That is something the German political class should welcome.

It is legitimate to worry whether risk can be fully sliced out and shunted off to the junior securities. But it is hard to deny that the presence of such bonds will improve on the status quo. The only way to see if investors will buy the new products, and at what prices, is to try to put them on the market. The commission should push ahead.

In another sense the timing is just right. In June, leaders are due to make far-reaching decisions on governance and reforms for the euro. Having a safe asset proposal in the mix widens the opportunities for compromise. It would make it less risky, for example, to introduce a sovereign debt restructuring mechanism or risk weights for banks’ government bond holdings. [...]

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