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Volatility in Italian sovereign spreads has increased since mid-2011. This paper finds that news on the euro area debt crisis and country specific events were important drivers of sovereign spreads. Movements in sovereign spreads affect CDS spreads and bond yields of Italian banks, and are...
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-performing loans (NPLs) on bank cost of capital, credit and liquidity creation in the Eurozone. Empirical results confirm the model …
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diminishes their incentives to thwart default. This paper introduces a model of coordination failure to analyze how a … other creditors. We find that the relationship bank's signaling ability enhances its incentives to engage in forbearance … lending and infuences the conditions under which debtors face soft budget constraints. -- coordination failure ; global games …
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