Steffen Murau

Hyperinflation durch neue Schulden? 4 Sichtweisen auf nachhaltige Staatsfinanzen Nimmt der Staat zu viele Schulden auf? Ob das tragfähig ist, ist eine Frage des Finanzsystems. Das entscheidende Stichwort lautet »Fundierung«.

Nimmt der Staat zu viele Schulden auf? Ob das tragfähig ist, ist eine Frage des Finanzsystems. Das entscheidende Stichwort lautet »Fundierung«, schreiben @steffenmurau.bsky.social und Moritz Kapff.

Mit Beiträgen von @andreabinder.bsky.social @steffenmurau.bsky.social @martynalinartas.bsky.social @carolinmueller.bsky.social @larsdoepking.bsky.social @c-westermeier.bsky.social Patrick Samtlebe, Philip Manow, Janosch Prinz, Jenny Stupka, Jürgen Unger-Sirsch, Christian Neuhäuser und mehr!

Politische Theorien öffentlicher Finanzen

'Sondervermögen' eigener Art vormerken: Leviathan-Sonderband 2025

POLITISCHE THEORIEN ÖFFENTLICHER FINANZEN.

ZUR (DE-)POLITISIERUNG VON GELD, EIGENTUM UND STEUERN,

hrsg. mit Aaron Sahr & Eva Weiler und mit vielen tollen Beiträgen u.a. von…

Die deutsche Version des Papiers findet sich hier:

papers.ssrn.com/sol3/papers....

The piece draws on last year's OBFA-TRANSFORM Working Paper "State Finance Beyond the Core Budget", co-authored with @gregorlaudage.bsky.social , @agutersandu.bsky.social du.bsky.social, and Armin Haas

papers.ssrn.com/sol3/papers....

...with countless sub-balance sheets that are historically grown and subject to permanent transformation.

The German constitutional debt brake & the EU fiscal rules seek to constrain debt issuance on some balance sheets but then also define legal spaces for new OBFAs to emerge

We present our map of 'off-balance-sheet fiscal agencies' (OBFAs) in Germany, looking at their legal status, revenue schemes, and ways to issue debt.

👉 the state is not a single financial entity even though models and discourses tend to claim that. Instead, the state is a complex financial being...

Das fiskalische Ökosystem Schattenhaushalte sind keine Ausnahme, sondern seit Jahrzehnten fester Bestandteil der Staatsfinanzen. Sie spiegeln die deutsche Geschichte.

Very happy to see that the article @moritzecon.bsky.social and I have written on Germany's "fiscal ecosystem" has just been published online and in print in Surplus Magazine

www.surplusmagazin.de/staat-schatt...

🚨 Out now: Die dritte Surplus-Ausgabe »Wir kümmern uns« ist da.

Neoliberale schaffen einen Staat, der die Menschen allein lässt. Doch es braucht gemeinsame Fürsorge.

In den nächsten Tagen im Briefkasten, am Kiosk oder sofort online auf:
👉 www.surplusmagazin.de/surplus-3-wi...

The EU needs to step up its challenge to the dollar The euro should be developed more as a haven asset for times of market stress

Really great piece by @katie0martin.ft.com on our recent euro internationalisation paper, rightly concluding that fear of "industrial amounts of arguing" remains the EU's biggest obstacle www.ft.com/content/16e7...

🐈‍⬛🐈‍⬛🐈‍⬛

#empiresuicidewatch
A bit late to this but if you want to understand how the moody’s downgrade might affect US dollar global dominance you could see what @steffenmurau.bsky.social and i have to say here about the structural bases for US dollar dominance
papers.ssrn.com/sol3/papers....

@christopher-olk.bsky.social @andreabinder.bsky.social @buddyyakov.bsky.social @jwullweber.bsky.social @paulahaufe.bsky.social @simonschairer.bsky.social @proufos.bsky.social @lukasmaertin.bsky.social @annpettifor.bsky.social @cacrisalves.bsky.social @goldmatt.bsky.social @mattvermeir.bsky.social

@maxkrahe.bsky.social @clemfon.bsky.social @apsmolenska.bsky.social @isabelschnabel.bsky.social @martinsandbu.ft.com @stanjourdan.bsky.social @jordischroeder.bsky.social @uureeb.bsky.social @danielmcdowell.bsky.social @jryancollins.bsky.social @sdullien.bsky.social @sebastiankohl.bsky.social

@mcopelov.bsky.social @stefwalter.bsky.social @sebdiessner.bsky.social @nilsredeker.bsky.social @fabianpape.bsky.social @gbronstering.bsky.social @monicadileo.bsky.social @thunen.bsky.social @sandertordoir.bsky.social @stefeich.bsky.social @asezech.bsky.social @philippasigl.bsky.social

Thanks to @dfg.de for funding this research.

Building on & maybe interesting to @danielagabor.bsky.social @jvtk.bsky.social @benbraun.bsky.social @aldasoro.bsky.social @adamtooze.bsky.social @csissoko.bsky.social @jomichell.bsky.social @danawrey.bsky.social @morganricks1.bsky.social

🅰️ the security is treated as encumbered on the repo borrower's balance sheet

🅱️ the security can be re-used by the repo lender in a second repo transaction

💡 This can only work because repos' 'inherent ambiguity' allows keeping the security's whereabouts in the 2nd operation under-specified

🔚

💡 Again: Structural sovereign debt funding in 🇪🇺 depends systematically on the inherently ambiguous 2nd operation in a repo

👉 In the current regulatory environment, a de facto 'bilocation' of the collateral in the 2nd repo operation emerges

😎 EU law both endorses that...

The Eurocrisis emerged when equivalence broke down after Greece reported a higher budget deficit in 2009

As countries' sov bonds dropped out of Eurosystem collateral framework, they also couldn't be funded any more via CCP-cleared GC Repo

(cf @danielagabor.bsky.social, @jvtk.bsky.social et al)

👉 Sovereign debt funding also happens via horizontal repos. Particularly important were GC repos cleared via Central Counterparties (CCPs)

From 2005, CCPs designed collateral baskets such that €-area gov bonds were treated as equivalent

This equivalence started changing with the Lehman bankruptcy

2️⃣ Horizontal repos are key for the interbank market in Europe. Cash-rich & cash-poor banks exchange reserves for collateral without creating new money

A key distinction is btw General Collateral (GC) & Special Collateral (SC) repo, but both have the same on-balance-sheet notation in our methodology

💡 With regard to ↕️ vertical repos in Europe, the 'inherent ambiguity' plays out to conceal where the collateral is

👉 Why did this happen in the first place? We argue that repos' 'inherent ambiguity' (which conceals the collateral) helps deal with the EU's infamous 'monetary financing prohibition'. Repos help conceal the extent of central bank funding which was unpopular in the 80s/90s when the rules were written

Off-balance-sheet central bank funding via vertical repos was no longer possible & states could not refinance themselves

The crisis usually gets ascribed to too high debt levels but the real issue was a poorly constructed macro-financial funding structure over-reliant on ambiguous repo operations

👉 If the funding breaks away, we get a sovereign debt crisis. See Eurocrisis: it was essentially an implosion of the sovereign debt funding mechanism via repos. Repo eligibility of sovereign debt was made dependent on rating agencies. When the ratings dropped, a self-fulfilling prophecy emerged.

thus helps fund sovereign debt on NCB balance sheets without writing it down explicitly. The funding is off-balance-sheet, just a loan appears on-NCB-balance-sheet (cf Bundesbank example👇)

States fully depend on this off-balance-sheet central bank funding for their structural sovereign debt burden.

1️⃣ Banks use money-creating vertical repos to borrow from 'their' national central banks (NCBs) in the Eurosystem

They get newly created reserves by pledging collateral which touches the NCBs' 'off-balance-sheet balance sheet'

The collateral is typically a sovereign debt security. The 2nd operation

🇪🇺🇪🇺We then apply these conceptual points on two case studies of repos in Europe's monetary architecture🇪🇺🇪🇺

↕️ Vertical repos of banks with the Eurosystem

↔️ Horizontal repos btw banks on the secured interbank market

In both cases, we see the 'inherent ambiguity' of the 2nd operation nicely at play...

💡💡 Basel III regulations treat the security as 'encumbered' on the repo borrower's balance sheet

👉 seems like an imperfect regulatory fix that tries to make sense of the inherent ambiguity (informed by Lehman)
👉 doesn't do justice to the mechanism, doesn't acknowledge additional credit creation

💡 We see the 2nd operation as the main source of repos' inherent ambiguity. Depending on context, one can claim that the lender has the security during the repo contract, or the borrower, or both, or noone.

👉 all of this has happened in repo history
👉 also lay at the heart of the Lehman Bankruptcy