THE EUROPEAN SOVEREIGN-DEBT CRISIS: A FAILURE OF REGULATION?

Autor:	Juliusz Jabłecki
Rok vydání:	2012
Předmět:	Literature and Literary Theory Economic policy Bond Yield (finance) media_common.quotation_subject Financial system Market liquidity Debt Political Science and International Relations Financial crisis Economics Position (finance) European debt crisis media_common Credit risk
Zdroj:	Critical Review. 24:1-35
ISSN:	1933-8007 0891-3811
DOI:	10.1080/08913811.2012.684469
Popis:	Recent scholarship has underscored the possibility that capital-adequacy regulations may have contributed to the 2008 financial crisis by privileging highly rated asset-backed securities, such as mortgage-backed securities. The same regulations gave an even more privileged position to sovereign debt, leading to the question of whether they helped cause the European sovereign-debt crisis. There is little question that the regulations encouraged European banks to invest in European governments' bonds, but it does not appear that this encouragement led to more government borrowing by significantly reducing the yield governments needed to pay on their debt. However, it does appear that capital-adequacy regulations—along with post-2008 liquidity regulations—concentrated sovereign risk in the European banking system, aggravating the sovereign-debt problem by requiring government bailouts that, in turn, required the issuance of more sovereign debt, further jeopardizing the governments' fiscal position a...
Databáze:	OpenAIRE
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