The restructuring of Greece's debt offers a clean case study of the dynamics of sovereign restructuring. This essay discusses the powerlessness of sovereign creditors, Greece's predicament, and its resolution through (a) a two-step refinancing with bond accumulation and value injection and (b)...

We propose a model that links the conditional probability of bank failure to insolvency and liquidity risks, and show that liquidity risk affects bank failures through systematic and idiosyncratic channels. Empirical results based on U.S. bank data between 1985 and 2011 show that this model...