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dc.contributor.authorSteinkamp, Svenen_US
dc.contributor.authorWestermann, Franken_US
dc.description.abstractThe 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.en_US
dc.publisherInst. für Empirische Wirtschaftsforschung Osnabrücken_US
dc.relation.ispartofseriesWorking Paper, Institute of Empirical Economic Research, University of Osnabrück 92en_US
dc.subject.keywordGovernment bond spreadsen_US
dc.subject.keywordsenior tranche lendingen_US
dc.subject.keywordmultiple equilibriaen_US
dc.subject.keywordsovereign debt crisisen_US
dc.titleOn creditor seniority and sovereign bond prices in Europeen_US
dc.typeWorking Paperen_US
Appears in Collections:Working Papers, Institut für Empirische Wirtschaftsforschung, Universität Osnabrück

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