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This paper addresses the following questions. Is there evidence of financial contagion in the Eurozone? To what extent a country's vulnerability to contagion depends on "fundamentals" as opposed the government's "credibility"? We look at the empirical evidence on European sovereigns CDS spreads...
Persistent link: https://www.econbiz.de/10011731038
survey points to a growing role of sovereign-bank linkages, legal risks, domestic debt and default, and of official creditors … debt sustainability and default will remain acute in both developing and advanced economies. …
Persistent link: https://www.econbiz.de/10012489670
We use days with tail sovereign CDS spread changes of peripheral countries to identify the effects of shocks to the cost of borrowing of these countries on stock returns of banks from other countries. We find that tail sovereign GIIPS CDS changes have an asymmetric impact in that bank stocks...
Persistent link: https://www.econbiz.de/10011963385
In the wake of the global financial crisis, the economically weaker countries of the European Union that adopted the euro as a common currency soon started to feel the pressure of markets. In a monetary union, with one single central bank in charge of the monetary policy but without a common...
Persistent link: https://www.econbiz.de/10014162939
activity, debt-to-gdp ratio, default costs). Our model embeds a 'Southern view' of the crisis (transfers did not help) and a … bailout was to prevent an exit from the eurozone and possible contagion. Bailouts to avoid sovereign default were …
Persistent link: https://www.econbiz.de/10014077962
This study provides an empirical analysis of the impact of the Greek debt crisis on stock returns of U.S. commercial banks. We find that good (bad) news events pertaining to the Greek debt crisis, identified by large changes in the Greek CDS spread, produce insignificant positive (negative)...
Persistent link: https://www.econbiz.de/10013025329
, due to a changed perception in the country’s growth prospects, to an increase in the risk of domestic default, or to a …
Persistent link: https://www.econbiz.de/10014025374
Most of the European countries that are members of the euro area continue to face a crisis that is seriously undermining their economic and social development. The aim of this paper is to show that:(1) the sovereign debt crisis is essentially due to a monetary pathology related to the mechanism...
Persistent link: https://www.econbiz.de/10013090697
In 2007, countries in the euro periphery were enjoying stable growth, low deficits and low spreads. Then the financial crisis erupted and pushed them into deep recession, raising their deficits and debt levels. By 2010, they were facing severe debt problems. Spreads increased and, surprisingly,...
Persistent link: https://www.econbiz.de/10013058811
In 2007, countries in the Euro periphery were enjoying stable growth, low deficits, and low spreads. Then the financial crisis erupted and pushed them into deep recessions, raising their deficits and debt levels. By 2010,they were facing severe debt problems. Spreads increased and, surprisingly,...
Persistent link: https://www.econbiz.de/10013059093