scholarly journals The Invisible Hand of the Government: 'Moral Suasion' During the European Sovereign Debt Crisis

2016 ◽  
Author(s):  
Steven R. G. Ongena ◽  
Alexander A. Popov ◽  
Neeltje van Horen
Keyword(s):  
Sovereign Debt ◽  
Debt Crisis ◽  
Invisible Hand ◽  
Sovereign Debt Crisis ◽  
European Sovereign Debt Crisis ◽  
Moral Suasion ◽  
The Government ◽  
The Invisible

scholarly journals The Invisible Hand of the Government: Moral Suasion during the European Sovereign Debt Crisis

2019 ◽  
Vol 11 (4) ◽  
pp. 346-379 ◽  
Author(s):  
Steven Ongena ◽  
Alexander Popov ◽  
Neeltje Van Horen
Keyword(s):  
Sovereign Debt ◽  
Debt Crisis ◽  
Regulatory Compliance ◽  
Government Support ◽  
Invisible Hand ◽  
Sovereign Debt Crisis ◽  
European Sovereign Debt Crisis ◽  
Moral Suasion ◽  
The Government ◽  
Domestic Banks

Using proprietary data on banks’ monthly securities holdings, we show that during the European sovereign debt crisis, domestic banks in fiscally stressed countries were considerably more likely than foreign banks to increase their holdings of domestic sovereign bonds during months when the government needed to roll over a relatively large amount of maturing debt. This result cannot be explained by risk shifting, carry trading, or regulatory compliance. Domestic banks that received government support, are small, or with weaker balance sheets were particularly susceptible to “moral suasion,” while governance of banks played less of a role. (JEL D72, E62, G21, G28, H11, H63).

scholarly journals The Impact of the Introduction of Uniform European Collective Action Clauses on European Government Bonds as a Regulatory Result of the European Sovereign Debt Crisis

2020 ◽  
Vol 14 (1) ◽  
pp. 1
Author(s):  
Nicoletta Layher ◽  
Eyden Samunderu
Keyword(s):  
European Union ◽  
Sovereign Debt ◽  
Debt Crisis ◽  
Sovereign Debt Crisis ◽  
The European Union ◽  
Bond Yields ◽  
Member States ◽  
Sovereign Bond ◽  
European Sovereign Debt Crisis ◽  
Collective Action Clauses

This paper conducts an empirical study on the inclusion of uniform European Collective Action Clauses (CACs) in sovereign bond contracts issued from member states of the European Union, introduced as a regulatory result of the European sovereign debt crisis. The study focuses on the reaction of sovereign bond yields from European Union member states with the inclusion of the new regulation in the European Union. A two-stage least squares regression analysis is adopted in order to determine the extent of impact effects of CACs on member states sovereign bond yields. Evidence is found that CACs in the European Union are priced on financial markets and that sovereign bond yields do respond to the inclusion of uniform CACs in the European Union.

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