Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/183359 
Year of Publication: 
2018
Series/Report no.: 
ECB Working Paper No. 2177
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
This paper identifies the various channels that give rise to a "sovereign-bank nexus" whereby the financial health of banks and sovereigns is intertwined. We find that banks and sovereigns are linked by three interacting channels: banks hold large amounts of sovereign debt; banks are protected by government guarantees; and the health of banks and governments affect and is affected by economic activity. Evidence suggests that all three channels are relevant. The paper concludes with a discussion of the policy implications of these findings.
Subjects: 
fiscal policy
sovereign risk
financial stability
financial crisis
sovereign-bank nexus
JEL: 
E62
F34
G01
G21
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-3282-3
Document Type: 
Working Paper

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