Since the onset of the eurozone sovereign debt crisis, credit risk spreads in Europe have diverged. Despite this divergence, credit risk comoves strongly within certain country groups such as the eurozone periphery. We seek to answer what the determinants of the observed pattern of credit risk...

After a brief review of the origin of the subprime crisis, we argue that the set of reforms proposed recently by national and international groups to reduce the risk of global banking crises constitutes an incomplete reform agenda. Three important issues remain, in our opinion, to be addressed...