Ulrike Hammerich (Copyright)  Puzzle Puzzel Puzzlespiel
Roundup, 17 Nov 2017

After the establishment of the Banking Union, the European Commission is working on measures to foster capital market deepening in Europe. Key goals for a European Capital Markets Union are to provide firms with alternative funding sources to bank credit and to make economies more resilient to local ... more

Tobias Machhaus (Copyright)  Solar Solarenergie Sonnenenergie
Press Release, 16 Nov 2017

Baden-Württemberg, Mecklenburg Western Pomerania, and Bavaria are the leading federal states in the field of renewable energy. That is the result from a comparison of the federal states which was compiled by the German Institute for Economic Research (DIW Berlin) and the Center for Solar Energy ... more

puje (Copyright)  Statistik Diagramm Bilanz
Roundup, 15 Nov 2017

Financial market indicators can provide valuable information for forecasting macroeconomic developments. In response to the global financial crisis of 2007/2008, the role of financial variables for forecasting has been revisited, and new empirical and theoretical forecasting methods able to ... more

Gk (Copyright)  Detailaufnahme Detailansicht Detail
Report, 10 Nov 2017

Fostering cross-country risk-sharing via capital markets is a central macroeconomic objective of the Capital Markets Union. Risk-sharing means that individuals, firms or public-sector authorities, located in a region or country suffering from a temporary and idiosyncratic economic shock, would be ... more

Jürgen Wiesler (Copyright)  Mathematik Mathe Tafel
Press Release, 08 Nov 2017

Boys consider themselves to be more gifted in mathematics than their grades indicate, whereas girls think their language skills are stronger. Differences in students’ self-evaluation of their skills are evident by the fifth grade and remain present throughout higher grades Boys think higher ... more

List of news
by Jan Friedrich, Matthias Thiemann, in Vierteljahrshefte zur Wirtschaftsforschung

This paper examines the supervision of Central Clearing Counterparties (CCPs) in Europe, since they function as an important pillar of the Capital Markets Union. Our research indicates that the current national-based supervision of CCPs leads to regulatory arbitrage and exposes the EU to huge financial risks, especially in the context of the Brexit. We claim that a unified capital market should have a centralized capital markets regulator to avoid a hazardous regulatory race to the bottom. We argue that the ECB is suitable for taking on this common supervisor role in the short run, while ESMA should be equipped with enhanced capabilities to accomplish the task in the long run.

by Paolo D’Imperio, Waltraud Schelkle, in Vierteljahrshefte zur Wirtschaftsforschung

A Capital Markets Union (CMU) is the great hope of European policymakers. The plan for a CMU tries to reduce the reliance of European investors on banks and build up a market-based risk-sharing channel between member states. Our empirical analysis raises doubts that this can be achieved through the CMU as presently conceived. In line with other skeptics, we provide evidence that (i) financial flows are generally pro-cyclical; (ii) market-based risk-sharing mechanisms tend to break down for member states when they would be most needed; and (iii) even the most developed capital markets crash in a systemic financial crisis. During the Great Recession, failing market risk-sharing was replaced by the ECB through the cross-border payments system TARGET and by troika programs. We conclude that public safety nets must be robust enough to substitute for markets. The CMU is unlikely to make much difference to risk-sharing within the EU.

by Hans-Helmut Kotz, Dorothea Schäfer, in Vierteljahrshefte zur Wirtschaftsforschung

Compared to the U.S., the euro area has been underperforming in the wake of the Great Financial Crisis (GFC). This holds especially true for peripheral euro area economies. Whereas the U.S. is characterised by a financial system dominated by arms’ length (capital-market oriented) interaction between providers and users of funds, in Europe, in many cases, bank intermediation dominates. However, fragile, capital-constrained banks also meant a curtailed supply of funds, an issue especially for bank-dependent small or medium-sized firms (SMEs). Hence, it appears more than evident that easing the access to capital markets (in particular through securitization) should support medium-run growth perspectives, especially in peripheral euro area economies, those worst hit. There might, however, be structural (economic) reasons why SMEs prefer (local) bank relationships. Given substantial underlying idiosyncrasies, placing SME debt, in collateralised form, on capital markets has proven difficult. Finally, the strong emphasis put in the CMU project on disintermediation comes with side-effects. National systems of finance are often part and parcel of an institutional landscape with internal coherence. Reengineering finance is therefore more than a parametric adjustment, calling for political debate.

List of Publications

Latest Tweets of DIW Berlin:

summarizes pros &cons of capital market openness and discusses stability implications of different forms of capital market integration
, , & are the leading German federal states in the field of . That’s the result from a comparison of the federal states which was compiled by DIW Berlin, , &
Franziska Holz explaining what phaseout pathways we can expect in each case study country, their NDCs+ and impacts on global , results from our project at
For a great and concise overview of the lit on the use of financial market indicators in forecasting see my colleague Stefan Gebauer's new DIW Roundup:
After a lost decade in the 2000s, ’s golden economic years are continuing, with another impressive growth quarter of 0.8%, with few signs of overheating. Expect this to continue for at least another two years.
financial variables in : new discusses theoretical models & the link between financial and
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