The Leading eBooks Store Online 4,353,660 members ⚫ 1,442,818 ebooks

New to eBooks.com?

Learn more

Euro Area Sovereign Risk During the Crisis

Euro Area Sovereign Risk During the Crisis by Edda Zoli
Buy this eBook
US$ 9.00
(If any tax is payable it will be calculated and shown at checkout.)
While the use of public resources is critical to cushion the impact of the financial crisis on the euro-area economy, it is key that the entailed fiscal costs not be seen by markets as undermining fiscal sustainability. From this perspective, to what extent do movements in euro area sovereign spreads reflect country-specific solvency concerns? In line with previous studies, the paper suggests that euro area sovereign risk premium differentials tend to comove over time and are mainly driven by a common time-varying factor, mimicking global risk repricing. Since October 2008, however, there is evidence that markets have become progressively more concerned about the potential fiscal implications of national financial sectors'' frailty and future debt dynamics. The liquidity of sovereign bond markets still seems to play a significant (albeit fairly limited) role in explaining changes in euro area spreads.
International Monetary Fund; October 2009
23 pages; ISBN 9781452749051
Read online, or download in secure EPUB or secure PDF format
Title: Euro Area Sovereign Risk During the Crisis
Author: Edda Zoli; Silvia Sgherri