# A Safe Asset For Europe

1 Opinion April 28, 2017 Financial Times ![](/sites/default/files/styles/246w/public/assets/images/svnieuwe-article.jpg?itok=36dPKIKT) By Stijn Van Nieuwerburgh, Markus Brunnermeier, Marco Pagano, Ricardo Reis, and Dimitri Vayanos > Appropriately designed financial regulation would ensure that banks would switch from their existing sovereign bond holdings towards ESBies.

There is an emerging public debate on European Safe Bonds (ESBies). As the authors of the [original proposal in 2011](http://post.nyssa.org/nyssa-news/2011/12/european-safe-bonds-esbies.html), of the Euro-nomics group, we welcome that debate. From a European perspective, we feel it important that discussions are not informed by a common understanding of what ESBies are -- and what they are not.

A [recent FT Alphaville post](https://ftalphaville.ft.com/2017/04/25/2187829/guest-post-why-esbies-wont-solve-the-euro-areas-problems/) by an Italisn regulator argued that ESBies won't solve the euro area's problems because they do no entail joint liability among sovereigns. Yet, back in January, an article in the [*Handelsblatt*](http://www.handelsblatt.com/my/politik/international/european-safe-bonds-der-geheime-schuldenplan/19307842.html?nlayer=Politik-News_11247984&ticket=ST-3238421-qMpdDwBMLxn00sjYfCDk-ap2), accused ESBies of leading to "mutualisation through the backdoor."

Read the full article as published by the [Financial Times](https://ftalphaville.ft.com/2017/04/28/2188024/guest-post-a-safe-asset-for-europe/).

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*Stijn Van Nieuwerburgh is the David S. Loeb Professor of Finance at NYU Stern.*## More Opinions by Stijn Van Nieuwerburgh

- [How Investors Interpreted Government Bailout Guarantees](https://www.stern.nyu.edu/index%2ephp/experience-stern/faculty-research/how-investors-interpreted-government-bailout-guarantees)
- [Paying it Forward: Diversification for Norway’s Oil Fund](https://www.stern.nyu.edu/index%2ephp/experience-stern/faculty-research/paying-it-forward-diversification-norway-s-oil-fund)