Euro bond and Risk transmission: Difference between pages

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A proposed new debt instrument for the euro area, also known as a Stability Bond.
''Risk - systemic risk.''


The new instrument would be denominated in euro and issued <u>jointly</u> by a number of relevant countries, for example all of the euro area (informally Eurozone or [[Euro zone]]) countries.
Risk transmission is the spread of risk from one sector to another, or within a sector.


This proposal is sometimes known as 'common issuance' (contrasted with separate sovereign issuance by each individual country as at present).


The spelling without the space has begun to dominate the literature even though that may cause confusion given the established meaning of [[Eurobond]], some authors seeking to use the term [[international bond]] for the latter.
:<span style="color:#4B0082">'''''Credit risk transmission during crisis events'''''</span>


:"... we model a high-dimensional network of European CDS [Credit Default Swap] spreads to assess the transmission of credit risk to the non-financial corporate sector.


''Note''
:Our findings suggest a sectoral clustering in the CDS network, where financial institutions are located in the center and non-financial as well as sovereign CDS are grouped around the financial center.


Take care: a bond denominated in euros is a 'euro bond' in the same way that a bond denominated in dollars is a 'dollar bond'. A euro bond in that sense may be a [[domestic bond]], a Eurobond or [[international bond]], a [[foreign bond]] and even, if any are ever issued, a Euro bond as used in this entry.
:The network has a geographical component reflected in differences in the magnitude and direction of real-sector risk transmission across European countries.  


:While risk transmission to the non-financial sector increases during crisis events, risk transmission within the non-financial sector remains largely unchanged."


== See also ==
:''Analyzing credit risk transmission to the non-financial sector in Europe: a network approach - European Systemic Risk Board - Working Paper 78, July 2018.''
* [[Eurobond]]
 
* [[An introduction to debt securities]]
 
==See also==
*[[Contagion]]
*[[Credit default swap]]
*[[Credit risk]]
*[[European Systemic Risk Board]]
*[[Sovereign]]
*[[Systemic risk]]
 
[[Category:The_business_context]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]
[[Category:Financial_products_and_markets]]

Revision as of 02:37, 16 November 2021

Risk - systemic risk.

Risk transmission is the spread of risk from one sector to another, or within a sector.


Credit risk transmission during crisis events
"... we model a high-dimensional network of European CDS [Credit Default Swap] spreads to assess the transmission of credit risk to the non-financial corporate sector.
Our findings suggest a sectoral clustering in the CDS network, where financial institutions are located in the center and non-financial as well as sovereign CDS are grouped around the financial center.
The network has a geographical component reflected in differences in the magnitude and direction of real-sector risk transmission across European countries.
While risk transmission to the non-financial sector increases during crisis events, risk transmission within the non-financial sector remains largely unchanged."
Analyzing credit risk transmission to the non-financial sector in Europe: a network approach - European Systemic Risk Board - Working Paper 78, July 2018.


See also