This paper develops a market-based approach to implement so called Eurobonds, i.e. common sovereign debt securities of European Monetary Union (EMU) countries. By applying an asset-backed security (ABS) approach positive implications of a common bond can be achieved and negative incentives (e.g....

Direct European Central Bank intervention in the market for asset-backed securities (ABS) has the potential to become, under certain conditions, a mechanism to unlock credit markets in the euro area. * When and how the ECB acts will be significant. Acting immediately to purchase existing...