We research the association of the sovereign crisis stemming from periphery EMU countries and monetary policy in terms of financial stability. Empirical results are derived on the linkage of monetary policy reflected through interbank lending rates i.e. banking sector fragility to long term...

This paper explores the nature of the interaction of short- and long-term interest rates within the European Monetary System for the period 1979-1999. The empirical examination centers on the 'German Dominance' hypothesis which purports that German interest rates should convey valuable...