A tale of two overhangs: The nexus of financial sector and sovereign credit risks
Acharya, Viral, Drechsler, Itamar & Schnabl, Philipp. The deadliest aspect of the Eurozone crisis is the tripwire linking the riskiness of banks and governments. This column provides evidence of the link and explains how it arose. It argues that given the near-chaos-like interaction, the zero risk weights on sovereign bonds should be revisited. Πηγή: Voxeu πλήρες […]