Pockrandt, Johannes; Radde, Sören - In: DIW Economic Bulletin 2 (2012) 11, pp. 11-18
Recent developments in Ireland, Greece, and Spain have shown that sovereign debt crises endanger the solvency of domestic banking sectors, while banking crises in turn endanger the solvency of the domestic sovereigns. This diabolic loop between government and bank solvency is exacerbated by the...