Central bank digital currencies
13 January 2021
Erasmus and Turing
11 January 2021
Brexit and Marxism
3 January 2021
What to do about the Covid financial system bailouts?
22 December 2020
The crypto-technical response to the Covid-19 bailouts
13 December 2020
The libertarian response to the Covid-19 financial turmoil
9 December 2020
The socialist response to the Covid-19 financial turmoil
4 December 2020
On the response of the financial authorities to Covid-19
2 December 2020
The Covid-19 bailouts and the future of the capitalist banking system
26 November 2020
Which programming language is best for economic research: Julia, Matlab, Python or R?
20 August 2020
ARM on AWS for R
15 June 2020
Low vol strategies
8 May 2020
Of Julia and R
8 May 2020
How to manipulate risk forecasts 101
30 April 2020
The five principles of correct riskometer use
27 April 2020
The problem with Backtesting
25 April 2020
The magic of riskometers
24 April 2020
Risk and scientific socialism
23 April 2020
Financial crises and epidemics
19 April 2020
Hayek and Corona
17 April 2020
Hayek et Corona
17 April 2020
Ignoring the Corona analysis
15 April 2020
The coronavirus crisis is no 2008
26 March 2020
Artificial intelligence as a central banker
6 March 2020
Systemic consequences of outsourcing to the cloud
2 December 2019
The dissonance of the short and long term
12 August 2019
Central banks and reputation risk
6 August 2019
The Brexit culture war
5 May 2019
All about BoB — The Bank of England Bot
29 April 2019
My tiny, tiny contribution to Apple's fall in profits
6 January 2019
The 2018 market in a 250 year context
1 January 2019
Short and long-term risk
3 December 2018
Perceived and actual risk
2 December 2018
Cryptocurrencies: Financial stability and fairness
9 November 2018
The October 2018 stock market in a historical context
1 November 2018
The hierarchy of financial policies
12 September 2018
Which numerical computing language is best: Julia, MATLAB, Python or R?
9 July 2018
26 June 2018
What are risk models good for?
3 June 2018
The McNamara fallacy in financial policymaking
1 June 2018
VIX, CISS and all the political uncertainty
20 May 2018
Here be dragons
30 March 2018
Low risk as a predictor of financial crises
26 March 2018
Cryptocurrencies don't make sense
13 February 2018
Yesterday's mini crash in a historical context
6 February 2018
Artificial intelligence and the stability of markets
15 November 2017
European bank-sovereign doom loop
30 September 2017
Do the new financial regulations favour the largest banks?
27 September 2017
The ECB Systemic Risk Indicator
24 September 2017
Finance is not engineering
22 September 2017
University of Iceland seminar
14 June 2017
Brexit and systemic risk
31 May 2017
Should macroprudential policy target real estate prices?
12 May 2017
Learning from history at LQG
13 April 2017
Is Julia ready for prime time?
12 March 2017
With capital controls gone, Iceland must prioritise investing abroad
12 March 2017
Competing Brexit visions
25 February 2017
Systemic consequences of Brexit
23 February 2017
Why macropru can end up being procyclical
15 December 2016
The fatal flaw in macropru: It ignores political risk
8 December 2016
Why it doesn't make sense to hold bonds
27 June 2016
On the financial market consequences of Brexit
24 June 2016
Cyber risk as systemic risk
10 June 2016
Big Banks' Risk Does Not Compute
24 May 2016
Interview on þjóðbraut on Hringbraut
21 May 2016
Farewell CoCos
26 April 2016
Will Brexit give us the 1950s or Hong Kong?
18 April 2016
Of Brexit and regulations
16 April 2016
IMF and Iceland
12 April 2016
Stability in Iceland
7 April 2016
Everybody right, everybody wrong: Plural rationalities in macroprudential regulation
18 March 2016
Of tail risk
12 March 2016
Models and regulations and the political leadership
26 February 2016
Why do we rely so much on models when we know they can't be trusted?
25 February 2016
Does a true model exist and does it matter?
25 February 2016
The point of central banks
25 January 2016
Volatility, financial crises and Minsky's hypothesis
2 October 2015
Impact of the recent market turmoil on risk measures
28 August 2015
Iceland, Greece and political hectoring
13 August 2015
A proposed research and policy agenda for systemic risk
7 August 2015
Are asset managers systemically important?
5 August 2015
Objective function of macro-prudential regulations
24 July 2015
Risky business: Finding the balance between financial stability and risk
24 July 2015
Regulators could be responsible for next financial crash
21 July 2015
How Iceland is falling behind. On Sprengisandur
12 July 2015
Greece on Sprengisandur
12 July 2015
Why Iceland can now remove capital controls
11 June 2015
Market moves that are supposed to happen every half-decade keep happening
14 May 2015
Capital controls
12 May 2015
What do ES and VaR say about the tails
25 April 2015
Why risk is hard to measure
25 April 2015
Post-Crisis banking regulation: Evolution of economic thinking as it happened on Vox
2 March 2015
The Danish FX event
24 February 2015
On the Swiss FX shock
24 February 2015
Europe's proposed capital markets union
23 February 2015
What the Swiss FX shock says about risk models
18 January 2015
Model risk: Risk measures when models may be wrong
8 June 2014
The new market-risk regulations
28 November 2013
Solvency II: Three principles to respect
21 October 2013
Political challenges of the macroprudential agenda
6 September 2013
Iceland's post-Crisis economy: A myth or a miracle?
21 May 2013
The capital controls in Cyprus and the Icelandic experience
28 March 2013
Towards a more procyclical financial system
6 March 2013
Europe's pre-Eurozone debt crisis: Faroe Islands in the 1990s
11 September 2012
Countercyclical regulation in Solvency II: Merits and flaws
23 June 2012
The Greek crisis: When political desire triumphs economic reality
2 March 2012
Iceland and the IMF: Why the capital controls are entirely wrong
14 November 2011
Iceland: Was the IMF programme successful?
27 October 2011
How not to resolve a banking crisis: Learning from Iceland's mistakes
26 October 2011
Capital, politics and bank weaknesses
27 June 2011
The appropriate use of risk models: Part II
17 June 2011
The appropriate use of risk models: Part I
16 June 2011
Lessons from the Icesave rejection
27 April 2011
A prudential regulatory issue at the heart of Solvency II
31 March 2011
Valuing insurers' liabilities during crises: What EU policymakers should not do
18 March 2011
Risk and crises: How the models failed and are failing
18 February 2011
The saga of Icesave: A new CEPR Policy Insight
26 January 2010
Iceland applies for EU membership, the outcome is uncertain
21 July 2009
Bonus incensed
25 May 2009
Not so fast! There's no reason to regulate everything
25 March 2009
Modelling financial turmoil through endogenous risk
11 March 2009
Financial regulation built on sand: The myth of the riskometer
1 March 2009
Government failures in Iceland: Entranced by banking
9 February 2009
How bad could the crisis get? Lessons from Iceland
12 November 2008
Regulation and financial models: Complexity kills
29 September 2008
Blame the models
8 May 2008

Erasmus and Turing

11 January 2021

As a part of its quest for independence, Britain decided to leave the Erasmus program. We now have Turing, the global version. So, will it lead us to the sunny uplands?

A few years ago, a friend challenged me to name one positive aspect of the European Union. I said the Erasmus program.

It is a European program that helps young people to spend the year in a University abroad. A laudable goal, one might think.

As a part of Brexit, Britain decided to leave Erasmus. While the government hasn’t said much as to why, there are plenty of comments out there, like a recent piece titled Erasmus and Brexit by Robert Tyler, Political Projects Manager of the ECR Party. Mr Tyler makes two arguments:

“Whilst at the same time saving the British taxpayer money — after all the UK put more money into the programme than it got out of it.”


“Pulling out of Erasmus captures the essence of those concerns held by leave voters and demonstrates that those people who voted to leave the EU weren’t on the whole nativist, protectionist, nationalists like Nigel Farage, but rather more flexible internationalists.”

In other words, Erasmus costs too much and the Brexit voters don’t like our young people to spend time in Europe.

The argument is instructive by what it omits.

The United Kingdom used to be a practitioner of soft power par excellence, and I am proud to have been recruited a few times to project Britain’s soft power. Erasmus helps enormously. It creates anglophiles, those who will be in power in 20 years. Now they will go elsewhere and soft power is lost.


Britain is short of young people with mastery of foreign languages and cultures. Erasmus graduates were of considerable benefit the government, private companies, governments, and other parts of the British economy.

All that is lost, for cost and nativist reasons.

In its place, we have the Turing program, a global version of Erasmus, one that presumably will get the same amount of money. I could not figure out how much Erasmus costs the UK — if you know, please let me know — but Turing gets £100 million. Now, that is apparently not per year, but in total, but they don’t tell us for how many years.

So Turing will be much cheaper than Erasmus. I don’t see the cheep-and-cheerful Turing version being as good. But in all fairness, lets look at the numbers.

The Government says it will provide funding for around 35,000 students per year, targeting “students from disadvantaged backgrounds”.

Lets do the sums. If it is £100 million per year, them each student gets £2,857 to go abroad, pay transportation, tuition and accommodation. Hard to see how that £2,857 will cover anything but a tiny part of the cost. I am not seeing those “students from disadvantaged backgrounds” being able to fund the considerable shortfall. As the £100 million is over many years, scale that £2,857 down accordingly.

The devil is in the details. There certainly are benefits in student exchanges with universities in the United States, but I’m having a hard time seeing that working in practice. Will Turing pay the $72,391 cost of attending Harvard for a year? Will the United States reciprocate? No.

And then there is the Department of Education (DfE) charged with running Turing. Not the most competent of government agencies, and one that finds it very hard to do new things.

I have a bet that Turing will not be a success in five years. A bottle of Dom Pérignon is at stake — with luck, I will lose my bet.

The numbers are not large, and as a British taxpayer, I think both Erasmus and Turing are worth the money.

And if the British government actually cared about student exchanges and all the benefits they bring, it would have done both Turing and Erasmus.

This way it looks just like spiteful politics.

Brexit bloggs

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