European sovereign debt crisis

This paper evaluates the transmission of the U.S. Subprime Crisis and the European Sovereign Debt Crisis to sixteen emerging markets. A GARCH model is formulated to test for the transmission of shocks and for transmission effects through financial channels. The bankruptcy of Lehman Brothers and the Greek debt restructuring are used as breakpoints for these sub-periods. The U.S. stock market has a significant transmission effect on emerging markets at the early stage of the crises and normal time, whether in terms of a contemporaneous day or a one-day lag time.

19p cothumenhmong4 24-03-2020 31 1   Download

The analysis of time varying correlation between stock prices and exchange rates in the context of international investments has been well researched in the literature in last few years.

27p trinhthamhodang2 21-01-2020 17 4   Download

Against this backdrop, and assuming that policy actions at the European and Member-State level will continue to rein in the sovereign-debt crisis, thus allowing an easing of financing conditions and a return of confidence, the EU economy is expected to stabilise at the turn of the year and to embark on a moderate recovery path thereafter. With strong internal headwinds holding back domestic demand, net exports are likely to remain the most important growth driver next year.

20p trinhcaidat 19-04-2013 63 4   Download

Nonetheless, a resurgent aggravation of the sovereign-debt crisis with grave consequences for growth and financial stability remains the largest downside risk. This remains intrinsically linked to the risk of slippage or delay with the implementation of policy measures agreed at EU/euro-area and Member- State levels. A downside risk also stems from labour markets, where a deeper drop in employment would weigh on growth prospects going forward.

191p trinhcaidat 19-04-2013 47 5   Download

Where a sub-fund may have investment exposure to Europe in the context of its investment objective and strategy, in light of the fiscal conditions and concerns on sovereign debt of certain European countries, such a sub-fund may be subject to a number of risks arising from a potential crisis in Europe.

64p dangsuynghi 15-03-2013 44 7   Download

Presently the EU and ECB do not have a mechanism to deal with anything but the most severe, acute, and immediate aspects of the crisis. Two other possible solutions have been discussed, and we show below that they are both inferior to the Trichet bonds solution we propose. The solution proposed by European authorities so far involves the ECB’s purchase of outstanding sovereign debt in the market, which has only succeeded in buying a small amount of the distressed debt while pushing bond prices upwards as a result of the intervention.

20p taisaocothedung 12-01-2013 49 1   Download

Without a workable EU remedy for the sovereign debt problems, countries like Portugal, Spain and Italy are being treated by the market, which so far has ignored the European rescue fund and related efforts to calm the crisis, as potential defaulters. This could lead to some countries being forced by financial markets to “restructure” their debt (under the circumstances this would be effectively defaulting on their outstanding obligations) with potentially catastrophic consequences for those countries as well as for the future of the Euro and the EU....

24p taisaocothedung 12-01-2013 38 1   Download

We propose the creation of “Trichet Bonds” as a comprehensive solution to the current sovereign debt crisis in the EU area. “Trichet Bonds,” to be named after the ECB president Jean-Claude Trichet, will be similar to “Brady Bonds” that resolved the Latin American debt crisis in the late 1980s and were named after the then Treasury Secretary Nicholas Brady. Like the Brady Bonds, Trichet Bonds will be new long-duration bonds issued by countries in the EU area that will be collateralized by zero-coupon bonds of the same duration issued by the ECB.

8p taisaocothedung 12-01-2013 57 1   Download