Elisabetta Croci Angelini Francesco Farina(*) SOVEREIGN
... risk rose and financial operators started discriminating across EMU countries depending on macroeconomic fundamentals. In many countries, the impact of country-specific factors on their spreads appears to be interwoven with the upward pressure exerted by the international risk factor proxied by the ...
... risk rose and financial operators started discriminating across EMU countries depending on macroeconomic fundamentals. In many countries, the impact of country-specific factors on their spreads appears to be interwoven with the upward pressure exerted by the international risk factor proxied by the ...
CESifo Working Paper no. 5591 - ORCA
... the result of misguided internal policies. The second programme (2012-14), despite imperfections in its application, was successful in putting Greece to the path of economic recovery; however, the progress it achieved was fragile and vulnerable to internal and external risks. Finally, the new Greek ...
... the result of misguided internal policies. The second programme (2012-14), despite imperfections in its application, was successful in putting Greece to the path of economic recovery; however, the progress it achieved was fragile and vulnerable to internal and external risks. Finally, the new Greek ...
The Diversity of Debt Crises in Europe Jerome L. Stein
... in the eurozone, Spanish prices and costs rose relative to the rest of the eurozone. The Spanish economy lost competitiveness. Unlike previous expansions, the resort to financing was not chiefly by the public sector, which reduced its debt throughout the period (see Table 2). Instead it was the Span ...
... in the eurozone, Spanish prices and costs rose relative to the rest of the eurozone. The Spanish economy lost competitiveness. Unlike previous expansions, the resort to financing was not chiefly by the public sector, which reduced its debt throughout the period (see Table 2). Instead it was the Span ...
Future Directions of the Irish Economy Roundtable: Policy challenges for the Irish economy
... expected to peek in 2013 at around 124% of GDP and gradually decline thereafter. • However, the government debt path remains fragile and sensitive to growth and interest rate shocks. • Continued fiscal consolidation is necessary in order to bring the debt ratio to safer levels. • Maintaining a suffi ...
... expected to peek in 2013 at around 124% of GDP and gradually decline thereafter. • However, the government debt path remains fragile and sensitive to growth and interest rate shocks. • Continued fiscal consolidation is necessary in order to bring the debt ratio to safer levels. • Maintaining a suffi ...
1 MEDITERRANEAN BLUES: THE CRISIS IN
... against any future sovereign default by those countries. This shaved off most of the existing national-risk premiums that had prevailed on Mediterranean country bonds. The initial result of these financial flows was rapid interest-rate convergence, which held as long as economic times were good (bet ...
... against any future sovereign default by those countries. This shaved off most of the existing national-risk premiums that had prevailed on Mediterranean country bonds. The initial result of these financial flows was rapid interest-rate convergence, which held as long as economic times were good (bet ...
The European Monetary Fund
... tandem CDS premia and bond rates (figures 1 and 7). Those banks and hedge funds, which are specialized in “making money out of money”, took advantage of high public indebtedness, a fragile banking system and/or the lack of competitiveness. CDS speculation against sovereign states has become the most ...
... tandem CDS premia and bond rates (figures 1 and 7). Those banks and hedge funds, which are specialized in “making money out of money”, took advantage of high public indebtedness, a fragile banking system and/or the lack of competitiveness. CDS speculation against sovereign states has become the most ...
"Financial Crises and Policy" Andrea Prestipino NYU September 2013
... A simple bailout policy is a one time unanticipated transfer from depositors to bankers I denote by B the size of the bailout measured in terms of the percentage reduction in banks’indebtedness associated with the transfers A simple bailout of size B from a given state st = (kt; dt; t) just moves th ...
... A simple bailout policy is a one time unanticipated transfer from depositors to bankers I denote by B the size of the bailout measured in terms of the percentage reduction in banks’indebtedness associated with the transfers A simple bailout of size B from a given state st = (kt; dt; t) just moves th ...
HIPC Expenditures, Ownership and the Role of Donors
... Extra ODA to achieve MDGs Additional aid levels required to halve poverty (income growth) Current Additional ODA levels ODA ...
... Extra ODA to achieve MDGs Additional aid levels required to halve poverty (income growth) Current Additional ODA levels ODA ...
The crisis in the Eurozone: the current situation and perspectives
... Due to these processes, it is really a big challenge to bring these deficits back to satisfactory level. Governments then have to go to the market and ask for additional debt to cover its deficit. These countries, if not aided, will possibly default and will be forced to restructure their debt. This ...
... Due to these processes, it is really a big challenge to bring these deficits back to satisfactory level. Governments then have to go to the market and ask for additional debt to cover its deficit. These countries, if not aided, will possibly default and will be forced to restructure their debt. This ...
A Post-Crisis Eurozone: Still an Attractive Offer for Central
... within the eurozone and may dispel the nightmare of the “Japanese effect”, that is, a eurozone with a longlasting period of deflation and no growth, which, combined with ageing societies and huge public debt, is a looming problem for eurozone governments. The goals of all these unorthodox monetary l ...
... within the eurozone and may dispel the nightmare of the “Japanese effect”, that is, a eurozone with a longlasting period of deflation and no growth, which, combined with ageing societies and huge public debt, is a looming problem for eurozone governments. The goals of all these unorthodox monetary l ...
PDF Download
... the deposits and fines would even be front-loaded, that is larger in the beginning than later. This is because the deposits (fines) consist both of a variable component (0.1 percent of GDP for each whole percentage point excess of the deficit ratio above three percent of GDP) and a fixed component ( ...
... the deposits and fines would even be front-loaded, that is larger in the beginning than later. This is because the deposits (fines) consist both of a variable component (0.1 percent of GDP for each whole percentage point excess of the deficit ratio above three percent of GDP) and a fixed component ( ...
Chapter 15 Powerpoint
... • Bonds represent a debt that gives the borrower’s long-term promise to repay the lender – Bonds have a face amount and a maturity date – The nominal return on a bond is stated as its coupon rate ...
... • Bonds represent a debt that gives the borrower’s long-term promise to repay the lender – Bonds have a face amount and a maturity date – The nominal return on a bond is stated as its coupon rate ...
... points higher than average three best performing states of European Union (EU), no more than 3% government deficit to GDP ratio, no more than 60% gross government debt GDP ratio, maintaining currency level and long term interest rate not exceeding 2% points higher than three lowest inflation states ...
how to deal with macroeconomic imbalances?
... Ireland and Portugal were no longer able to fund themselves at any sustainable price. One question that often asked is why did financial markets, which had provided Greece with ample financing over years when its current account deficits and the (approximate) size of its public debt were well known, ...
... Ireland and Portugal were no longer able to fund themselves at any sustainable price. One question that often asked is why did financial markets, which had provided Greece with ample financing over years when its current account deficits and the (approximate) size of its public debt were well known, ...
The future of the euro
... overall increase in intra-EMU trade volume of €600 billion since 1999. The rest is likely to have come from the further development of the EU’s single market, more intense globalisation, and strong growth in the wake of the EU’s enlargement to Eastern Europe. Intra-EMU trade increased in particular ...
... overall increase in intra-EMU trade volume of €600 billion since 1999. The rest is likely to have come from the further development of the EU’s single market, more intense globalisation, and strong growth in the wake of the EU’s enlargement to Eastern Europe. Intra-EMU trade increased in particular ...
Mario Draghi: Europe and the euro - a family affair
... markets about debt sustainability. But the average public debt level in the euro area is still very high, at around 95% of GDP. This means that consolidation efforts need to be maintained in the years to come. The role of the ECB The second reason for the improvement in markets is actions by the ECB ...
... markets about debt sustainability. But the average public debt level in the euro area is still very high, at around 95% of GDP. This means that consolidation efforts need to be maintained in the years to come. The role of the ECB The second reason for the improvement in markets is actions by the ECB ...
Common Currency and Determinants of Government Bond
... impact of deteriorated fiscal balances compared to the general sentiments on the market. On average an increase of one percentage point in the budget deficit (visa-vis Germany) implied an upswing of only 2.4 basis points in the government bond yield spread before the crisis. On the contrary, the cha ...
... impact of deteriorated fiscal balances compared to the general sentiments on the market. On average an increase of one percentage point in the budget deficit (visa-vis Germany) implied an upswing of only 2.4 basis points in the government bond yield spread before the crisis. On the contrary, the cha ...
The eurozone banking system: a sector undergoing
... action of the SSM may also give rise to problems (see, for example, Hüttl and Schoenmaker, 2016). Indeed, there are banks operating in the eurozone that have their origins elsewhere in the EU, in countries in which the big banks of the eurozone also have a presence. Justified, in formal terms, by th ...
... action of the SSM may also give rise to problems (see, for example, Hüttl and Schoenmaker, 2016). Indeed, there are banks operating in the eurozone that have their origins elsewhere in the EU, in countries in which the big banks of the eurozone also have a presence. Justified, in formal terms, by th ...
Public Debt, Fiscal Solvency & Macroeconomic Uncertainty in
... This stylized fact can be explained by modeling fiscal solvency as a problem of social insurance with financial frictions – Credible commitment to repay induces endogenous law of motion with a “natural debt limit” ...
... This stylized fact can be explained by modeling fiscal solvency as a problem of social insurance with financial frictions – Credible commitment to repay induces endogenous law of motion with a “natural debt limit” ...
ratio-presentation-2013-revised
... direct purchase bond with a lending institution? Based on the following factors, we decided to issue an RFP for a tax-exempt direct purchase bond financing rather than public market bond debt on Trinity’s credit rating: Costs to secure funds are lower for direct purchase No public market “red ta ...
... direct purchase bond with a lending institution? Based on the following factors, we decided to issue an RFP for a tax-exempt direct purchase bond financing rather than public market bond debt on Trinity’s credit rating: Costs to secure funds are lower for direct purchase No public market “red ta ...
Document
... Germany, obsessed by private and public debt aversion. All this will likely cause a double-dip recession. Koo proposes to abolish the 3% deficit cap in the Maastricht treaty and to replace it by prohibition of government borrowing abroad. The 3% rule ignores the possibility of BSR and can make thing ...
... Germany, obsessed by private and public debt aversion. All this will likely cause a double-dip recession. Koo proposes to abolish the 3% deficit cap in the Maastricht treaty and to replace it by prohibition of government borrowing abroad. The 3% rule ignores the possibility of BSR and can make thing ...
Roubini Global Economics - Italy Should Restructure Its Public Debt
... So, using precious official resources to prevent the unavoidable is a huge mistake that will finance the exit of those lucky enough to have claims maturing now and/or lucky enough to dump their claims on the official sector. And since the official sector is effectively senior as provider of debtor-i ...
... So, using precious official resources to prevent the unavoidable is a huge mistake that will finance the exit of those lucky enough to have claims maturing now and/or lucky enough to dump their claims on the official sector. And since the official sector is effectively senior as provider of debtor-i ...
European debt crisis
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The European debt crisis (often also referred to as the Eurozone crisis or the European sovereign debt crisis) is a multi-year debt crisis that has been taking place in the European Union since the end of 2009. Several eurozone member states (Greece, Portugal, Ireland, Spain and Cyprus) were unable to repay or refinance their government debt or to bail out over-indebted banks under their national supervision without the assistance of third parties like other Eurozone countries, the European Central Bank (ECB), or the International Monetary Fund (IMF).The detailed causes of the debt crises varied. In several countries, private debts arising from a property bubble were transferred to sovereign debt as a result of banking system bailouts and government responses to slowing economies post-bubble. The structure of the eurozone as a currency union (i.e., one currency) without fiscal union (e.g., different tax and public pension rules) contributed to the crisis and limited the ability of European leaders to respond. European banks own a significant amount of sovereign debt, such that concerns regarding the solvency of banking systems or sovereigns are negatively reinforcing.As concerns intensified in early 2010 and thereafter, leading European nations implemented a series of financial support measures such as the European Financial Stability Facility (EFSF) and European Stability Mechanism (ESM). The ECB also contributed to solve the crisis by lowering interest rates and providing cheap loans of more than one trillion euro in order to maintain money flows between European banks. On 6 September 2012, the ECB calmed financial markets by announcing free unlimited support for all eurozone countries involved in a sovereign state bailout/precautionary programme from EFSF/ESM, through some yield lowering Outright Monetary Transactions (OMT).Return to economic growth and improved structural deficits enabled Ireland and Portugal to exit their bailout programmes in July 2014. Greece and Cyprus both managed to partly regain market access in 2014. Their bailout programme is scheduled to end in March 2016. Spain never officially received a bailout programme. It's rescue package from the ESM was earmarked for a bank recapitalization fund and did not include financial support for the government itself.The crisis had significant adverse economic effects and labour market effects, with unemployment rates in Greece and Spain reaching 27%, and was blamed for subdued economic growth, not only for the entire eurozone, but for the entire European Union. As such, it can be argued to have had a major political impact on the ruling governments in 9 out of 19 eurozone countries, contributing to power shifts in Greece, Ireland, France, Italy, Portugal, Spain, Slovenia, Slovakia, and the Netherlands.