More than four years since the outbreak of the sovereign debt crisis in the euro area the banking systems of several countries remain exposed to the vagaries of government bond markets. The paper analyzes the different channels through which sovereign risk affects banking risk (and vice versa), presents some new evidence on bank-sovereign links, and discusses policy options for addressing the related risks.
No. 213 – The negative feedback loop between banks and sovereigns
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- No. 213 – The negative feedback loop between banks and sovereigns pdf 1.0 MB Data pubblicazione: 10 February 2014