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Legal clauses and sovereign bond pricing in the euro area

November 12, 2018 Bilal 0

Legal clauses and sovereign bond pricing in the euro area https://ift.tt/2PctLA8 Sovereign bond pricing in the euro area: When legal clauses matter The discussion on sovereign debt restructuring in the euro area has recently focused on legal considerations, in particular on whether the legal framework should be reformed to make restructurings more ‘viable’, for example via new collective action clauses (Bénassy-Quéré et al. 2018, Tabellini 2018, Pisani-Ferry and Zettelmeyer 2018).  Should sovereign debts in Europe be ‘hard’ or ‘easy’ to restructure? The fundamental trade-off behind this question is well understood, at least theoretically (e.g. Bolton and Jeanne 2007, 2009, Pitchford […]

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Beyond spreads: Measuring sovereign market stress in the euro area

October 16, 2018 Bilal 0

Beyond spreads: Measuring sovereign market stress in the euro area https://ift.tt/2QUOMeT JavaScript is disabled on your browser. Please enable JavaScript to use all the features on this page. Beyond spreads: Measuring sovereign market stress in the euro area☆ Abstract We develop a novel composite indicator to measure sovereign bond market stress in the euro area. The indicator integrates yield and liquidity spreads along with volatility into an overall measure of sovereign market stress. An application to the spillover literature suggests that stress mainly originates from a few countries, but that spillover patterns also vary over time. JEL classification C43 E44 […]

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IMF Fiscal Monitor: Managing Public Wealth, October 2018

October 16, 2018 Bilal 0

IMF Fiscal Monitor: Managing Public Wealth, October 2018 https://ift.tt/2pDJSHV Back to Top Managing Public Wealth Public sector balance sheets bring together the entirety of what the state owns and owes, offering a broader fiscal picture beyond debt and deficits. Once governments understand the size and nature of public assets, they can start managing them more effectively, raising considerable additional revenue. Also, public sector balance sheet analysis allows for better risk management and policymaking. The Fiscal Monitor provides governments the tools to analyze the resilience of public finances. By identifying risks within the balance sheet, governments can act to manage or mitigate […]

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Systemic Banking Crises Revisited

September 19, 2018 Bilal 0

Systemic Banking Crises Revisited https://ift.tt/2CUk0Rr Systemic Banking Crises Revisited Author/Editor: Luc Laeven ; Fabian Valencia Publication Date: September 14, 2018 Electronic Access: Free Full Text. Use the free Adobe Acrobat Reader to view this PDF file Link to data for this title Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management. Summary: This paper updates the database on systemic banking […]

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Finance and Econ From the Web: Night lights measure growth, why are rates so low, are bankers liberals or conservatives….

September 19, 2018 Bilal 0

I thought I’d have a separate “Best Of the Web” devoted to economics and finance. Below I’ve found 30 articles and academic papers on macro and finance. Some are easy reads and others are denser, but I’ve summarised each one. Oh, if you come across anything interesting that I’ve  missed, then flag it to me and I’ll include it in my next list.  Enjoy! North and South Korea at night , 1992 vs 2008

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Rising Government Debt and What to Do About It — by Pierre Yared

September 4, 2018 Bilal 0

Rising Government Debt and What to Do About It — by Pierre Yared https://ift.tt/2NILeLO Rising Government Debt and What to Do About It NBER Working Paper No. 24979 Issued in August 2018 NBER Program(s):Economic Fluctuations and Growth, Public Economics, Political Economy Over the past four decades, government debt as a fraction of GDP has been on an upward trajectory in advanced economies, approaching levels not reached since World War II. While normative macroeconomic theories can explain the increase in the level of debt in certain periods as a response to macroeconomic shocks, they cannot explain the broad-based long-run trend in […]

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Quantitative Sovereign Default Models and the European Debt Crisis — by Luigi Bocola, Gideon Bornstein, Alessandro Dovis

September 4, 2018 Bilal 0

Quantitative Sovereign Default Models and the European Debt Crisis — by Luigi Bocola, Gideon Bornstein, Alessandro Dovis https://ift.tt/2oAQBBV Quantitative Sovereign Default Models and the European Debt Crisis NBER Working Paper No. 24981 Issued in August 2018 NBER Program(s):Economic Fluctuations and Growth, International Finance and Macroeconomics, Monetary Economics A large literature has developed quantitative versions of the Eaton and Gersovitz (1981) model to analyze default episodes on external debt. In this paper, we study whether the same framework can be applied to the analysis of debt crises in which domestic public debt plays a prominent role. We consider a model where […]

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Decoding Currency Crises

September 4, 2018 Bilal 0

Decoding Currency Crises https://ift.tt/2C8A2GZ Brazil invests little and is running a fiscal deficit of 9% of GDP, whereas Argentina invests a lot and is gradually consolidating its public finances. So why is Argentina the one that’s in trouble with the currency markets? SANTIAGO – Imagine two countries. Country A has a fiscal deficit of slightly over 5% of GDP, while country B shows a gaping hole of nearly 9%. Moreover, until recently A’s public debt barely exceeded 50% of GDP, while B’s public debt has been shooting up and will soon reach 90% of domestic output. Spencer Platt/Getty Images Aug […]

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Financial Crisis: The Endgame

September 4, 2018 Bilal 0

Financial Crisis: The Endgame https://ift.tt/2PYwcmC  “The only way we could have saved Lehman would have been by breaking the law.” Ben S. Bernanke, Testimony to the Financial Crisis Inquiry Commission, September 2, 2010 (cited by Reuters). “Lehman actually did have ample collateral for a loan that would have averted its sudden bankruptcy.” Laurence Ball, The Fed and Lehman Brothers, 2018, page xii. Ten years ago this month, the run on Lehman Brothers kicked off the third and final phase of the Great Financial Crisis (GFC) of 2007-2009. In two earlier posts (here and here), we describe the prior phases of […]

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Where Will The Next Crisis Come From?

September 3, 2018 Bilal 0

Where Will The Next Crisis Come From? https://ift.tt/2LcWm1r It’s been 10 years since a U.S. financial shock turned into a crisis in the global financial, market and economic system. On September 15, 2008, Lehman Brothers filed for bankruptcy as the shock waves from subprime mortgages rocked the entire financial system, shattering confidence and leading to an economic downfall. Regularly paying attention to financial news reveals one thing for certain: shocks to the global system happen all the time. Many of these shocks are absorbed by the system without much disruption. Recent examples of shocks might include last year’s escalating geopolitical […]