@techreport{Steinkamp2012creditor,
abstract = {The recent increase of interest rate spreads in Europe and their apparent detachment from underlying fundamental variables has generated a debate on multiple equilibria in the sovereign bond market (see Grauwe and Ji (2012)). We critically evaluate this hypothesis, by pointing towards an alternative explanation: the increasing share of senior lenders (IMF, ECB, EFSF, etc.) in the total outstanding government debt of countries in crisis. We illustrate the close relationship between senior tranche lending - including Target2 balances - and recent developments in the sovereign bond market, both graphically and in a formal regression analysis.},
address = {Osnabr\"{u}ck},
author = {Sven Steinkamp and Frank Westermann},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {F34; G12; H81; 330; Government bond spreads; Eurozone; senior tranche lending; multiple equilibria; sovereign debt crisis; Target},
language = {eng},
number = {92},
publisher = {Inst. f\"{u}r Empirische Wirtschaftsforschung},
title = {On creditor seniority and sovereign bond prices in Europe},
type = {Working Paper, Institute of Empirical Economic Research, University of Osnabr\"{u}ck},
url = {http://hdl.handle.net/10419/66502},
year = {2012}
}
