Saka, Orkun (2020) There is a good reason for EU banks to hold their own country's sovereign debt. LSE European Politics and Policy (EUROPP) blog (14 Jan 2020). Blog Entry.
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Abstract
The so called ‘moral suasion’ hypothesis indicates that governments may implicitly force their domestic banks to hold a larger chunk of government bonds when they experience stress. But is this reason to shift responsibilities from national to supranational institutions? Orkun Saka argues that there is in fact a good reason for EU banks to hold their own country’s sovereign debt: commercial banks have an informational advantage that allows them to act as buyers of last resort, absorbing local assets while potentially uninformed foreign banks may shed their exposure.
| Item Type: | Online resource (Blog Entry) |
|---|---|
| Additional Information: | © 2020 The Author |
| Divisions: | LSE |
| Subjects: | J Political Science > JN Political institutions (Europe) H Social Sciences > HG Finance H Social Sciences > HB Economic Theory |
| Date Deposited: | 28 Feb 2020 11:45 |
| Last Modified: | 25 Oct 2021 23:19 |
| URI: | http://eprints.lse.ac.uk/id/eprint/103620 |
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