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Julian Schumacher

Monetary Policy

Division

Monetary Policy Strategy

Current Position

Economist

Fields of interest

Macroeconomics and Monetary Economics,International Economics,Law and Economics

Email

Julian.Schumacher@ecb.europa.eu

Education
2015

PhD (Dr. rer. pol.) in Economics, Humboldt University Berlin

2013-2014

Visiting PhD Student, Columbia University

2010

M.Sc. Economics and Financial Economics, Nottingham University

2009

B.A. Political Science and Economics, University of Mannheim

Professional experience
2017-

Economist - Monetary Policy Strategy Division, Directorate General Monetary Policy, European Central Bank

2016-2017

Economist - Risk Strategy Division, Directorate Risk Management, European Central Bank

2015-2016

Graduate - Risk Analysis Division, Directorate Risk Management, European Central Bank

2014-2015

Research Associate - University of Mainz

2014

Visiting Researcher (summer) - International Monetary Fund

2010-2013

Research Assistant - Hertie School of Governance

Teaching experience
2015

Financial regulation after the crisis (Undergraduate seminar), University of Mainz

2015

Government debt sustainability analysis: theory and empirics (Graduate seminar), University of Mainz

2014-2015

Political Economy of Sovereign Debt (Graduate seminar), University of Mainz

2014-2015

International Trade: Theory and Policy (Undergraduate lecture), University of Mainz

2013

Applied Statistics (Graduate tutorial), Hertie School of Governance

2012

Political Economy of Sovereign Debt and Default (Graduate seminar), Hertie School of Governance

28 February 2018
WORKING PAPER SERIES - No. 2135
Details
Abstract
For centuries, defaulting governments were immune from legal action by foreign creditors. This paper shows that this is no longer the case. Building a dataset covering four decades, we find that creditor lawsuits have become an increasingly common feature of sovereign debt markets. The legal developments have strengthened the hands of creditors and raised the cost of default for debtors. We show that legal disputes in the US and the UK disrupt government access to international capital markets, as foreign courts can impose a financial embargo on sovereigns. The findings are consistent with theoretical models with creditor sanctions and suggest that sovereign debt is becoming more enforceable. We discuss how the threat of litigation affects debt management, government willingness to pay, and the resolution of debt crises.
JEL Code
F34 : International Economics→International Finance→International Lending and Debt Problems
G15 : Financial Economics→General Financial Markets→International Financial Markets
H63 : Public Economics→National Budget, Deficit, and Debt→Debt, Debt Management, Sovereign Debt
K22 : Law and Economics→Regulation and Business Law→Business and Securities Law
20 June 2018
WORKING PAPER SERIES - No. 2162
Details
Abstract
Governments often issue bonds in foreign jurisdictions, which can provide additional legal protection vis-à-vis domestic bonds. This paper studies the effect of this jurisdiction choice on a bond prices. We test whether foreign-law bonds trade at a premium compared to domestic-law bonds. We use the euro area 2006-2013 as a unique testing ground, controlling for currency risk, liquidity risk, and term structure. Foreign-law bonds indeed carry significantly lower yields in distress periods, and this effect rises as the risk of a sovereign default increases. These results indicate that, in times of crisis, governments can borrow at lower rates under foreign law.
JEL Code
F34 : International Economics→International Finance→International Lending and Debt Problems
G12 : Financial Economics→General Financial Markets→Asset Pricing, Trading Volume, Bond Interest Rates
K22 : Law and Economics→Regulation and Business Law→Business and Securities Law
26 September 2019
ECONOMIC BULLETIN - BOX
Economic Bulletin Issue 6, 2019
Details
Abstract
This box describes the elements and underlying rationale of the Governing Council’s comprehensive policy package decided in September.
JEL Code
E40 : Macroeconomics and Monetary Economics→Money and Interest Rates→General
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
15 January 2020
WORKING PAPER SERIES - No. 2366
Details
Abstract
Sovereign debt crises are difficult to solve. This paper studies the “holdout problem”, meaning the risk that creditors refuse to participate in a debt restructuring. We document a large variation in holdout rates, based on a comprehensive new dataset of 23 bond restructurings with external creditors since 1994. We then study the determinants of holdouts and find that the size of creditor losses (haircuts) is among the best predictors at the bond level. In a restructuring, bonds with higher haircuts see higher holdout rates, and the same is true for small bonds and those issued under foreign law. Collective action clauses (CACs) are effective in reducing holdout risks. However, classic CACs, with bond-by-bond voting, are not sufficient to assure high participation rates. Only the strongest form of CACs, with single-limb aggregate voting, minimizes the holdout problem according to our simulations. The results help to inform theory as well as current policy initiatives on reforming sovereign bond markets.
JEL Code
F34 : International Economics→International Finance→International Lending and Debt Problems
G15 : Financial Economics→General Financial Markets→International Financial Markets
H63 : Public Economics→National Budget, Deficit, and Debt→Debt, Debt Management, Sovereign Debt
K22 : Law and Economics→Regulation and Business Law→Business and Securities Law
2021
Journal of International Economics
  • Schumacher, J., Trebesch, C., and Enderlein, H.
2021
IMF Economic Review
  • Fang, C., Schumacher, J., and Trebesch, C.
2019
Capital Markets Law Journal
  • Grosse Steffen, G., Grund, S., and Schumacher, J.
2018
Journal of International Economics
  • Chamon, M., Schumacher, J., and Trebesch, C.
2015
Journal of Financial Regulation
  • Schumacher, J.
2015
Brookings Papers on Economic Activity
  • Schumacher, J. and Weder di Mauro, B.
2015
Journal of Law and Economics
  • Schumacher, J., Trebesch, C., and Enderlein, H.