Deadly Embrace: Sovereign and Financial Balance Sheets Doom Loops

344 citations recorded by the source corpus.

Subfields: Finance

How researchers see this paper

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The Invisible Hand of the Government: Moral Suasion during the European Sovereign Debt Crisis (2019, unknown): “Our paper most directly relates to the recent literature on the sovereign-bank “doom loop” (Acharya et al., 2014; Farhi and Tirole, 2018; Gennaioli et al., 2014a).”
ESBies: Safety in the Tranches (2017, background): “Furthermore, zero risk weights create a double moral hazard problem when sovereign risk increases: politicians encourage local banks to buy local sovereign bonds, and banks realize that holding these sovereign bonds allows them to collectively correlate their risks (Farhi & Tirole, 2016).”