Sovereign Risk and Financial Crisis The International Political Economy of the Eurozone

by Pepino, Silvia

• ISBN13: 9781137511638
• ISBN10: 113751163X
• Format: Hardcover
• Copyright: 2015-08-04
• Publisher: Palgrave Macmillan

Summary

Sovereign Risk and Financial Crisis provides an original and timely insight into the role that the domestic and international political economy played in the Eurozone sovereign debt crisis. It combines an innovative theoretical framework with in-depth bond market analysis to highlight the importance of the international and socio-political context for sovereign credibility in financial markets and global investment decisions. It opens up the debate on the influence of international and domestic political dynamics on the origins, unfolding and resolution of financial crisis, in developed democracies as well as in emerging markets. Silvia Pepino demonstrates the importance of the domestic political system, highlighting the role played by socio-political contestation and its interaction with institutional checks and balances. Moreover, the author expands the field of analysis to the international sphere, integrating the study of domestic and international sources of sovereign credibility. Finally, she argues that investment analysis evolves over time, so that the categorisation of sovereign borrowers as either developed democracies or emerging markets may not hold in the longer term.

Author Biography

Dr Silvia Pepino is Senior Adviser at the Bank of England, UK. Previously, she worked at JPMorgan and at leading global macro funds. She has frequently been quoted in the international media. She holds a PhD from the London School of Economics and Political Science, the TRIUM MBA degree from New York University-Stern, HEC Paris and the LSE, and an MSc from Bocconi University in Milan.

Table of Contents

PART I: SOVEREIGN RISK, POLITICS AND THE EUROZONE CRISISi. Introduction
1. Sovereign Risk, Developed Democracies and Financial Crisis
2. Sovereign Risk and the Debt Crisis in the Eurozone
3. The Focus of the Book
4. The Approach in the Book
5. Outline of the Book

PART II: BOND SPREADS, EMU DESIGN AND THE RUN-UP TO THE CRISIS
1. Introduction
2. Adaptive Markets and Sovereign Risk Models
3. The Political Sources of Sovereign Credibility in Financial Markets
4. International Influences on Sovereign Risk Perceptions
5. Theoretical Pillars

PART III: BOND SPREADS, EMU DESIGN AND THE RUN-UP TO THE CRISISi. Introduction
1. Government Bond Spreads and EMU Design
2. Greece and Ireland: The Macro and Political Economy
3. Politics and Spreads Before 2008

PART IV: THE GREEK SOVEREIGN DEBT CRISIS
1. Introduction
2. Evolving Investment Analysis and the Greek Sovereign Debt Crisis
3. Domestic Political Economy of the Greek Sovereign Debt Crisis
4. International Political Economy of the Greek Sovereign Debt Crisis
5. Key results from the Greek Case Study

PART V: THE IRISH SOVEREIGN DEBT CRISIS
1. Introduction
2. Evolving Investment Analysis and the Irish Sovereign Debt Crisis
3. Domestic Political Economy of the Irish Sovereign Debt Crisis
4. International Political Economy of the Irish Sovereign Debt Crisis
5. Key results from the Irish Case Study

PART VI: THE IPE OF THE EUROZONE SOVEREIGN DEBT CRISIS
1. Introduction
2. Lessons from the Greek and Irish Cases
3. Application to other Eurozone Sovereigns
4. Next Steps in IPE Research
5. Implications for Policy
6. Final Remarks