European banks are determined by a risk-return trade-off. Banks have been shown to disproportionally invest in bonds issued by … 2018 for a sample of 76 European banks. Using the Sharpe ratio for the risk-return assessment, we find that over the entire … period banks' investments and divestments of sovereign bonds are characterized by rational risk-return considerations …

We investigate whether sovereign bond holdings of European banks are determined by a risk-return trade-off. Using data … between 2011 and 2018 for 75 European banks, we confirm that banks exhibited risk-taking behavior during the sovereign debt … crisis, e.g., due to moral suasion. In the period 2015-2018, however, banks’ investments in sovereign bonds are characterized …

moral suasion to persuade home government-owned banks to hold more home government debt. The empirical approach makes use of … German banks' ownership structure, heterogeneity in the states' fiscal strength and detailed bank-level panel data on German … banks' state bond portfolio on the security- and bank-level for the time period Q4:2005-Q2:2014. Results show that home …

banks suffered significant outflows between June and August 2011. Due to credit market frictions, these outflows have … greater exposure to Eurozone banks decrease their holdings more than other funds. We show that relationships are important in …

Over the past three years, as the euro area has struggled with high levels of sovereign debt, it has been gradually …

The economic power of the euro countries should be strengthened by growth incentives, in the form of an additional … European growth fund, which should also be funded by financial transaction tax revenues. The current level of debt requires a … strengthening of government revenues. Taxes must be collected more effectively, and tax harmonisation should eliminate imbalances in …

to macroeconomic factors increased significantly in the post-Lehman period. Banks hold more bonds from euro area …In this paper, we use detailed data on the sovereign debt holdings of all German banks to analyse the determinants of …, sovereign bond holdings are heterogeneous across banks. Larger, weakly capitalised banks and banks with a small depositor base …

-prudential supervision of the largest Euro area banks. These new tasks should help complete financial integration, and make the Euro area … experience of central banks during the recent global financial crisis confirms that such risks are not purely hypothetical. …

be avoided by restricting banks' domestic sovereign exposures relative to their equity. Second, equity requirements can … be lowered if banks only hold senior domestic sovereign debt. Third, such requirements shrink even further if banks only … hold the senior tranche of an internationally diversified sovereign portfolio – known as ESBies in the euro-area context …