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A look back: what Eurozone “risk sharing” actually meant

Marcello Minenna, (2018), «A look back: what Eurozone “risk sharing” actually meant», Financial Times Alphaville, 10 Οκτωβρίου

The common narrative is that rescue programs have helped deeply troubled countries avoid sovereign bankruptcy or widespread bank failures. But, by avoiding extreme outcomes, these programs also protected the banks of the core countries — Germany and France, in particular — that had accumulated huge exposures to the periphery before the crisis. At the time, risk sharing (however unpleasant) was the best available option for the governments of the core countries. It saved them from intervening (at the expense of their taxpayers) to prop up their own national banking systems.

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