This study finds that equity returns in the banking sector in the wake of the Great Recession and the European sovereign debt crisis have been driven mainly by weak growth prospects and heightened sovereign risk and to a lesser extent, by deteriorating funding conditions and investor sentiment....

Economic analyses largely ignore Europe's fragmented public sphere, a feature that distinguishes the euro area from other major currency areas.This Policy Contribution identifies how narratives of the crisis developed since 2007, by identifying the key crisis-related topics in articles from four...

In a dynamic model of optimal bailouts, we show how borrower myopia affects the severity of debt crises. Myopic borrowers misprice the option to default with a U-shaped negative pricing error. The myopia discount changes the optimal bailout policy. Myopia gets punished when the distortions from...