Sovereign Risk, European Crisis Resolution Policies and Bond Yields

29 Pages Posted: 30 Nov 2015

Date Written: 2012

Abstract

We study the effects of the ECB monetary policy and the European crises resolution policies on the 10 year sovereign bond yields of seven European countries. We find that some of the decisions have had significant impact on sovereign bond yields and have succeeded in reducing stress in the financial markets. However, the impact of the same policy decision might have been positive for some countries while negative for others, suggesting that contagion effects may be important. The economically most significant effects on the bond yields have been due to the announcement of ECB's Securities Market Programme.

Suggested Citation

Laakkonen, Helinä, Sovereign Risk, European Crisis Resolution Policies and Bond Yields (2012). Bank of Finland Research Discussion Paper No. 22/2012. Available at SSRN: https://ssrn.com/abstract=2696043

Helinä Laakkonen

Bank of Finland ( email )

P.O. Box 160
Helsinki 00101
Finland

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