Saving the euro: self-fulfilling crisis and the ‘Draghi put’

Marcus Miller, Lei Zhang, 26 June 2014

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In surveying eight centuries of financial folly, Reinhart and Rogoff (2009) observed that:

Topics: International finance, Monetary policy
Tags: ECB, European sovereign debt crisis, eurozone, financial crises, Outright Monetary Transactions, self-fulfilling crises, sovereign debt, sovereign debt crisis

An early-warning indicator for debt sustainability

Casper van Ewijk, Jasper Lukkezen, Hugo Rojas-Romagosa, 28 November 2013

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Insight into the sustainability of public finances is critical to European policymakers and financial markets alike. It informs decisions concerning the need for reform and the determination of the appropriate risk premium on government debt. Furthermore, unsustainable public finances may cause significant spillovers, highlighting the need for international fiscal surveillance.

Topics: EU institutions, Global crisis
Tags: eurozone, sovereign debt crisis

Revisiting sovereign bankruptcy

Lee C. Buchheit , Beatrice Weder di Mauro, Anna Gelpern, Mitu Gulati, Ugo Panizza, Jeromin Zettelmeyer, 12 November 2013

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Sovereign-debt crises occur regularly and often violently. The recent debt crisis in Greece almost led to the collapse of the euro. Yet, there is no legally and politically recognised procedure for restructuring the debt of bankrupt sovereigns.

Topics: EU institutions, Global economy
Tags: eurozone, IMF, sovereign debt crisis

The first sovereign debt crisis in the EU

Jon Danielsson, Hermann Oskarsson, 11 September 2012

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Today is not the first time Europe has suffered a sovereign-debt crisis. Twenty years ago another crisis happened, passing without notice except amongst those affected, i.e. the Faroe Islands. The islands accumulated too much sovereign debt, eventually getting hit by a crisis much larger in magnitude than even the worst in the ongoing European crisis.

Topics: International finance, Politics and economics
Tags: eurozone, Faroes, sovereign debt crisis

Is Italy going to make it?

Nicola Borri, Gianfranco di Vaio, Giuseppe Ragusa, 4 February 2012

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Topics: EU policies, Macroeconomic policy
Tags: Eurozone crisis, Italy, sovereign debt crisis

The Future of Banking – solving the current crisis while addressing long-term challenges

Thorsten Beck, 25 October 2011

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Three years after the Lehman Brothers failure sent shockwaves through financial markets, banks are yet again in the centre of the storm.

Topics: EU institutions, EU policies, Europe's nations and regions, Financial markets, Macroeconomic policy, Politics and economics, Taxation
Tags: banking, capital requirements, euro bonds, Eurozone crisis, financial risks, financial transaction tax, prudential regulation, ring-fencing, sovereign debt crisis

A deadline for solving a deadly Eurozone sovereign debt crisis

Guillermo de la Dehesa, 20 October 2011

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Next Sunday the European Council meeting should, once for all, dispel all of investors’ concerns about the Eurozone crisis. If the Council is not able to achieve this, it will cross the final red line of patience, making it very unlikely to ever regain the confidence of investors.

Topics: EU policies
Tags: Eurozone crisis, sovereign debt crisis

Welcome to phase 2 of the Eurozone (EZ) crisis

Richard Baldwin, 5 September 2011

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IMF Chief Christine Lagarde made phase 2 official: "Developments this summer have indicated we are in a dangerous new phase" (Lagarde 2011).

Topics: EU policies, Europe's nations and regions
Tags: Bank default, Eurozone crisis, sovereign debt crisis

How does sovereign risk affect bank funding conditions? What can policymakers do?

Fabio Panetta, Michael Davies, 26 July 2011

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The financial crisis and the subsequent recession have caused a sharp deterioration in public finances across advanced countries, raising concerns about sovereign credit risk.

Topics: Global economy, International finance
Tags: Eurozone crisis, Fiscal crisis, sovereign debt crisis

A debt swap to save Greece and the euro

Avinash Persaud, 18 May 2010

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There is a simple way to resolve the Greek problem that will strengthen the euro, not undermine it, will lead international tax payers to recover the $145 billion they have pledged, not lose it, and will not require ambitious institution building in Europe at a time when the electorate is euro-fatigued. The solution requires three critical ingredients.

Topics: Financial markets
Tags: Eurozone crisis, greek crisis, sovereign debt crisis, voluntary debt swaps

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