The eurozone crisis : how banks and sovereigns came to be joined at the hip

  title={The eurozone crisis : how banks and sovereigns came to be joined at the hip},
  author={Ashoka Mody and Damiano Sandri},
The eurozone sovereign and banking crisis evolved in three phases. Following the onset of the subprime tremors in July 2007, the risk premia (spreads) on bonds issued by eurozone sovereigns rose from historically low levels; but they rose largely in tandem across the eurozone membership along with global banking stresses. The rescue of the US investment bank, Bear Stearns, in March 2008, oddly enough, marked the start of a distinctively European banking crisis accompanied by increased… CONTINUE READING
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