Country and Political Risk
First published:
ISBN: 9781782722175
If you are a Risk.net subscriber you are entitled to 20% off your Risk books purchases. Please email enquiries@riskbooks.com for more information.
As part of your Risk.net subscription you are entitled to 20% off all of your Risk Books purchases. If you would like to place an order please email enquiries@riskbooks.com
How the Eurozone Crisis Became a Banking Crisis, and the Risk of Japanisation
Katsura Daikuhara
Preface: Two economists’ views on the bank-sovereign linkage
Introduction
Assessing Country Risk: A Practical Guide
Sovereign Risk: Characteristics, History and a Review of Recent Research
The Arab Spring: Insights for Political Risk Analysis
The Eurozone Crisis: The Forgotten Risks of Private and External Debt
How the Eurozone Crisis Became a Banking Crisis, and the Risk of Japanisation
The Changing Dynamics of Country Risk
Capital Flight as a Political Risk Indicator
Debt Crisis Indicators of Emerging Markets versus Eurozone Economies
How Much Economic Capital Could European Banks Save? The Case for Optimal Sovereign Risk Allocation
Fixing Fundamental Flaws in Probabilistic Country Risk Models
Have We Learned the Country Risk Management Lessons of the 1997 Asian Financial Crisis?
Using Systems Thinking to Enhance Country Risk Assessment
Approaches to the Quantification of Country Risk
Stress Testing Across International Exposures and Activities
This chapter will discuss the risk linkage between the sovereign and banking sectors in the eurozone, and the mechanisms by which a sovereign debt crisis became a banking crisis. It will then explore the risk of “Japanisation” – an extended period of weak demand – in the eurozone.
The global financial crisis occurred after the “Paribas shock” of August 2007. The crisis was exacerbated by the real estate bubble in the US, and saddled the banking sector with significant liquidity problems. Subsequently, the “Greek shock” triggered the sovereign debt crisis in the eurozone, although it did not directly cause greater sovereign risk. The eurozone sovereign crisis had essentially been a result of the bubble bursting in 2007, and the consequent higher levels of sovereign debt that were taken on via countercyclical and bail-out policies. Prior to this, the eurozone had enjoyed robust economic development, and had recovered from the recession in the aftermath of the collapse of the US IT bubble in the early 2000s.
The first part of this chapter describes the mechanisms through which, after the global financial crisis, several linkages transferred risks between sovereign and banking
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
