The job of government bond analysts has been tough since the Eurozone crisis started. They’ve had to tell their clients a story behind every single bond spread hike since the fall of 2009. The list includes concerns over peripheral sovereigns’ public finances, deterioration of the fundamentals, financial sector credit risk, and European institutional coordination failures.
Watch the indices! Derivatives and the Eurozone sovereign debt crisis
Anne-Laure Delatte, Julien Fouquau, Richard Portes, 17 April 2014
The transmission of Federal Reserve tapering news to emerging financial markets
Joshua Aizenman, Mahir Binici, Michael M Hutchison, 4 April 2014
The quantitative easing (QE) policies of the US Federal Reserve in the years following the crisis of 2008–2009 included monthly securities purchases of long-term Treasury bonds and mortgage-backed securities totalling $85 billion in 2013. The cumulative outcome of these policies has been an unprecedented increase of the monetary base, mitigating the deflationary pressure of the crisis.
A first look at the structure and dynamics of the UK credit default swap (CDS) market
Evangelos Benos, Anne Wetherilt, Filip Zikes, 2 December 2013
The financial crisis of 2007–08 gave rise to widespread concerns that over-the-counter derivatives contributed to the build-up of systemic risk. As such, regulators have been quick to request and gain access to more information about activity in these markets.
The European ban on naked sovereign credit default swaps: A fake good idea
Anne-Laure Delatte, 23 July 2012
The European debt crisis has raised concerns regarding the use of credit default swaps (CDSs). CDSs are a derivative financial product used to hedge against the default risk of any entity. From the outset, it has been suspected that the crisis has been exacerbated by a few investors driving up the prices in the CDS market.
Credit default swaps: Useful, misleading, dangerous?
Richard Portes, 30 April 2012
Economic consequences of speculative side bets: The case of naked CDS
Yeon-Koo Che, Rajiv Sethi, 4 September 2010
There is arguably no class of financial transactions that has attracted more impassioned commentary over the past couple of years than naked credit default swaps. Robert Waldmann has equated such contracts with financial arson, Wolfgang Münchau with bank robberies, and Yves Smith with casino gambling.
Stormy Weather in the Credit Default Swap Market
Mathieu Gex , Virginie Coudert , 13 October 2008
Are credit derivatives markets particularly prone to speculation and contagion? The answer is certainly yes if we take a look at the credit default swaps (CDSs), which are the most widely traded credit derivatives.
- A tale of two depressions: What do the new data tell us? February 2010 updateEichengreen, O’Rourke
- Educated in America: College graduates and high school dropoutsHeckman, LaFontaine
- Eurozone breakup would trigger the mother of all financial crisesEichengreen
- Panic-driven austerity in the Eurozone and its implicationsDe Grauwe, Ji
- Debt, deleveraging, and the liquidity trap: A new modelKrugman
Cadot, de Melo, 16 June 2014