Sandri, Damiano, (2016), “How to resolve a systemic sovereign debt crisis”, Voxeu, 17 February
How should the international community deal with the solvency crisis of a systemic country? This column argues that the presence of spillovers calls for reducing bail-ins, while requiring somewhat greater fiscal adjustment by the crisis country. To avoid excessive fiscal consolidation, the international community should also provide highly systemic countries with official transfers. To contain moral hazard, it is important to use transfers only when spillovers are particularly severe.
Relevant Posts
- Featherstone, Kevin, (2011), ‘The Greek Sovereign Debt Crisis and EMU: A Failing State in a Skewed Regime‘, Journal of Common Market Studies, Vol. 49, Issue 2, p.p. 193–217.
- Ben Cheikh, Nidhaleddine, Rault, Christophe, (2015), “The Pass-Through of Exchange Rate in the Context of the European Sovereign Debt Crisis”, IZA, Οctober