Financial and economic analysis

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The economic and financial crisis has exposed a number of weaknesses in the economic governance of the EU Economic and Monetary Union. To ensure the economic well-being of EU citizens, the European Commission has among its main priorities the return to sustainable levels of growth and employment while guaranteeing financial stability and the stability of public finances.

To stimulate economic recovery in Europe, it is necessary to follow the economic development of the Member States. It also requires the completion of the single market for financial services in order to guarantee the stability of financial markets and public finances.

The JRC develops mathematical models and calculation tools which help the relevant Commission services, in conjunction with the Member States, to take informed policy decisions aimed at creating a stronger financial sector and restoring economic growth in the world. EU. The CCR helps to assess the impact of changes in financial regulations and to design effective economic policies to stabilize the economy in the short term while increasing potential growth in the medium and long term.

In the area of ​​financial services regulation, the European Commission is adopting a number of initiatives in response to the crisis, including measures to increase the protection of bank depositors, strengthen capital requirements for financial institutions and improve the management of cross-border crises in the banking sector.

In the broad field of macroeconomic and budgetary surveillance, the JRC provides scientific support to the policy process and decision-making of the European Commission. This is achieved by developing, simulating and estimating a wide range of macro-econometric models: from small/medium scale to large scale (GAP, GM and QUEST). The models are used by DG ECFIN for its macroeconomic policy assessments in the context of the Stability and Growth Pact and the European Semester, including the Macroeconomic Imbalance Procedure and the European Economic Forecast.

Financial analysis

The JRC’s modeling expertise supports the Commission services responsible for financial market regulation, competition and tax policy. The SYMBOL model (Systemic Model of Banking Originated Loss), developed by the JRC, helps to assess the impacts of proposed legislation on banking regulation. The JRC also supports the Commission in the framework of the banking union and the capital markets union.

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Financial analysis

Macroeconomic analysis for monitoring the economic position of the EU

The GM and QUEST III models, developed by the JRC in collaboration with the Commission’s Directorate-General for Economic and Financial Affairs, are used to support the Commission in the macroeconomic and budgetary surveillance tasks of the European Semester.

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Macroeconomic analysis for monitoring the economic position of the EU

Regional Macroeconomic Impact Assessments

The RHOMOLO model, developed by the JRC in collaboration with the Commission’s Directorate-General for Regional and Urban Policy, is used for a series of impact assessments of European Structural and Investment Funds and investment projects of the European Investment Bank.

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Applications and analyzes of the RHOMOLO policy

Surveillance of fiscal imbalances under the Stability and Growth Pact

The Stability and Growth Pact (SGP) is a framework for the harmonization of the national fiscal policies of the countries of the Economic and Monetary Union (EMU). The CCR calculates potential growth and the output gap, an important factor to consider when promoting the implementation of this framework.

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Surveillance of fiscal imbalances under the Stability and Growth Pact

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