Banks, Government Bonds, and Default

There is growing concern – but little systematic evidence – about the relationship between sovereign default and banking crises. This column documents the link between public default, bank bondholdings, and bank loans. Banks hold many public bonds in normal times (on average 9% of their assets), particularly in less financially developed countries. During sovereign defaults, […] View the full post at: Banks, Government Bonds, and Default Related posts: Will Dubai Default? Commercial Mortgage Default Rates May Rise to the Highest in 17 Years Bonds: Build America!