Download This PaperThe Negative Feedback Loop between Banks and Sovereigns
33 Pages Posted: 4 Apr 2014
Date Written: February 20, 2014
Abstract
More than three years since the outbreak of the sovereign debt crisis in the euro area the banking systems of several countries remain exposed to the vagaries of government bond markets. The paper analyzes the different channels through which sovereign risk affects banking risk (and vice versa), presents some new evidence on bank-sovereign links, and discusses policy options for addressing the related risks.
Keywords: sovereign risk, sovereign debt crisis, global financial crisis, banking sector risk, bank regulation, contagion, credit crunch
JEL Classification: E44, E51, E58, G01, G21, G28, H63
Suggested Citation: Suggested Citation
Angelini, Paolo and Grande, Giuseppe and Panetta, Fabio, The Negative Feedback Loop between Banks and Sovereigns (February 20, 2014). Bank of Italy Occasional Paper No. 213, Available at SSRN: https://ssrn.com/abstract=2419943 or http://dx.doi.org/10.2139/ssrn.2419943
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