Gros, Daniel. (2013) Banking Union with a Sovereign Virus. The self-serving regulatory treatment of sovereign debt in the euro area. CEPS Policy Brief No. 289, 27 March 2013. [Policy Paper]
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Abstract
In many eurozone countries, domestic banks often hold more than 20% of domestic public debt, which is an unsatisfactory situation given that banks are highly leveraged and that sovereign debt is inherently subject to default risk within the euro area. This paper by Daniel Gros finds, however, that the relative concentration of public debt on bank balance sheets is not just a result of the euro crisis, for there are strong additional incentives for banks in some countries to increase their sovereign. His contribution discusses a number of these regulatory incentives – the most important of which is specific to the euro area – and explores ways in which euro area banks can be weaned from massive investments in government bonds.
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Item Type: | Policy Paper |
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Uncontrolled Keywords: | Single Supervisory Mechanism (SSM) |
Subjects for non-EU documents: | EU policies and themes > Policies & related activities > economic and financial affairs > Single Market > capital, goods, services, workers EU policies and themes > Policies & related activities > economic and financial affairs > financial crisis 2008-on/reforms/economic governance |
Subjects for EU documents: | UNSPECIFIED |
EU Series and Periodicals: | UNSPECIFIED |
EU Annual Reports: | UNSPECIFIED |
Series: | Series > Centre for European Policy Studies (Brussels) > CEPS Policy Briefs |
Depositing User: | Phil Wilkin |
Official EU Document: | No |
Language: | English |
Date Deposited: | 16 Apr 2013 14:00 |
Number of Pages: | 8 |
Last Modified: | 16 Apr 2013 14:00 |
URI: | http://aei.pitt.edu/id/eprint/41612 |
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