Deadly Embrace: Sovereign and Financial Balance Sheets Doom Loops

• 成果类型: Article
• 署名作者: Farhi, Emmanuel; Tirole, Jean
• 署名单位: Harvard University; Universite de Toulouse; Universite Toulouse 1 Capitole; Toulouse School of Economics
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdx059
• 发表日期: 2018
• 页码: 1781-1823
• 关键词: time-inconsistency; Maturity Structure; default risk; public debt; Bailouts; crises; economies; liquidity; fragility; banking

摘要

The recent unravelling of the Eurozone's financial integration raised concerns about feedback loops between sovereign and banking insolvency. This article provides a theory of the feedback loop that allows for both domestic bailouts of the banking system and sovereign debt forgiveness by international creditors or solidarity by other countries. Our theory has important implications for the re-nationalization of sovereign debt, macroprudential regulation, and the rationale for banking unions.