The paper describes the interaction of sovereign debt, fiscal and banking crisis in the Eurozone and how the Eurozone is responding to these challenges. These events affect Cyprus in the longer term by affecting banking supervision and fiscal policy. In the shorter run, however, lessons from...

We investigate the performance of different variables as anchors for setting the level of the countercyclical regulatory capital buffer requirements for banks. The gap between the ratio of credit-to-GDP and its long-term backward-looking trend performs best as an indicator for the accumulation...