Money Market Integration and Sovereign CDS Spreads Dynamics in the New EU States

When the first phase of the crisis focused primarily on the interbank market volatility, the second phase spread on the instability of public finance. Although the overall stance of public finances of the new members is better than the old member countries, the differences within the new group are significant (from the performer Estonia to the laggard Hungary). Sovereign CDS spreads have become major variables focused on risks and expectations about the fiscal situation of different countries. In the paper we investigate, first, whether there is a link in the new member states (NMS) between the expectations about the condition of their public finances and the dynamics of money markets,including integration of national money markets with the euro area.....Our study confirm that the strong link between monetary and public finance risk as apart of total systemic risk increase during the crisis especially for currency boards regimes, when the link becomes stronger and pronounced. For the inflation targeting countries the link became weaker and less pronounced.money markets, sovereign CDS spreads, EU enlargement, monetary regimes, financial crisis

Money Market Integration and Sovereign CDS Spreads Dynamics in the New EU States

When the first phase of the crisis focused primarily on the interbank market volatility, the second phase spread on the instability of public finance. Although the overall stance of public finances of the new members is better than the old member countries, the differences within the new group are significant (from the performer Estonia to the laggard Hungary). Sovereign CDS spreads have become major variables focused on risks and expectations about the fiscal situation of different countries. In the paper we investigate, first, whether there is a link in the new member states (NMS) between the expectations about the condition of their public finances and the dynamics of money markets, including integration of national money markets with the euro area. Our study confirm that the strong link between monetary and public finance risk as apart of total systemic risk increase during the crisis especially for currency boards regimes, when the link becomes stronger and pronounced. For the inflation targeting countries the link became weaker and less pronounced.http://deepblue.lib.umich.edu/bitstream/2027.42/133016/1/wp1002.pd

Make EU trade with Brazil sustainable

Brazil, home to one of the planet's last great forests, is currently in trade negotiations with its second largest trading partner, the European Union (EU). We urge the EU to seize this critical opportunity to ensure that Brazil protects human rights and the environment

Make EU trade with Brazil sustainable

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