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Exit from a Monetary Union through Euroization: Discipline without Chaos

Question: Should the EMU exit option be used?
 NO: Bini Smaghi, Sept. 10, 2010
The idea of Greece leaving the Eurozone is absurd
….
 Merkel, March 26, 2012
Greece’s exit from the euro would be a
“catastrophic” political and economic mistake that
would severely weaken Europe’s single currency bloc
…
 Well maybe … Bank of Greece Governor (April, 24, 2012)
… warned the country’s politicians that any
deviation from strict austerity targets after May 6
general elections could lead to the country’s ouster
from the 17-member euro currency bloc.

Link la Presentación

(H/T: Alea)

Default and Lost Opportunities: A Message from Argentina for Euro-Zone Countries

Persistent euro-zone turmoil has kept the world economy on edge. Doubts about the ability of many countries in the single-currency region to service their sovereign debt are rising along with the interest rates the affected nations must pay to roll over maturing obligations.

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Transmission of distress in a bank credit

The European sovereign debt crisis has impaired many European banks. The distress on the European banks may transmit worldwide, and result in a large-scale knock-on default of financial institutions. This study presents a computer simulation model to analyze the risk of insolvency of banks and defaults in a bank credit network. Simulation experiments reproduce the knock-on default, and quantify the impact which is imposed on the number of bank defaults by heterogeneity of the bank credit network, the equity capital ratio of banks, and the capital surcharge on big banks.

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Hoy, EUR 1.317 (-0.82%)

El Parlamento griego deberá aprobar y convertir en ley el plan de ajuste acordado ayer entre los líderes políticos griegos, según exigieron los ministros de la Eurozona. Hasta entonces, los acreedores internacionales no desembolsarán los EUR 130 mil millones que necesita Grecia para no entrar en cesación de pagos.

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