OECD Journal: Financial Market Trends

Frequency
Annual
ISSN: 
1995-2872 (online)
ISSN: 
1995-2864 (print)
DOI: 
10.1787/19952872
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The articles in Financial Market Trends focus on trends, structural issues and developments in financial markets and the financial sector.

Article
 

Solving the Financial and Sovereign Debt Crisis in Europe You do not have access to this content

English
 
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    http://oecd.metastore.ingenta.com/content/2711021ec011.pdf
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Author(s):
Adrian Blundell-Wignall
23 Mar 2012
Pages:
24
Bibliographic information
No.:
29,
Volume:
2011,
Issue:
2
Pages:
201–224
DOI: 
10.1787/fmt-2011-5k9cswmzsdwj

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This paper examines the policies that have been proposed to solve the financial and sovereign debt crisis in Europe, against the backdrop of what the real underlying problems are: extreme differences in competitiveness; the absence of a growth strategy; sovereign, household and corporate debt at high levels in the very countries that are least competitive; and banks that have become too large, driven by dangerous trends in ‘capital markets banking’. The paper explains how counterparty risk spreads between banks and how the sovereign and banking crises are serving to exacerbate each other. Of all the policies proposed, the paper highlights those that are coherent and the magnitudes involved if the euro is not to fracture.
 
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