Michael Davies, Fabio Panetta, 26 July 2011
Sovereign credit risk has emerged as the main challenge to global financial stability. This column explains how a deterioration in sovereign creditworthiness can damage bank funding conditions before discussing possible options for mitigating these effects. It argues that banks can only do so much and that the policymakers have a critical role.
Full Article: How does sovereign risk affect bank funding conditions? What can policymakers do?
Sovereign credit risk has emerged as the main challenge to global financial stability. This column explains how a deterioration in sovereign creditworthiness can damage bank funding conditions before discussing possible options for mitigating these effects. It argues that banks can only do so much and that the policymakers have a critical role.
Full Article: How does sovereign risk affect bank funding conditions? What can policymakers do?