top of page
Rechercher
Photo du rédacteurHélène Dufour

Banking Regulation and Sovereign Default Risk: How Regulation Undermines Rules

Banking regulations encourage banks to invest in "risk-free" government bonds, affecting financial stability. This study reveals governments exploit this to increase fiscal flexibility. Zero-risk weighting of sovereign bonds lowers borrowing costs, promotes over-borrowing, and undermines fiscal rules.


2 vues0 commentaire

Posts récents

Voir tout

Comments


bottom of page