The pitfalls of official first-loss bond insurance
The pitfalls of official first-loss bond insurance

Author(s): Daniel Gros
Subject(s): Economic policy, EU-Accession / EU-DEvelopment, Financial Markets, Fiscal Politics / Budgeting
Published by: CEPS Centre for European Policy Studies
Keywords: EU; euro-zone; debt crisis; first loss insurance; economic policy; Italy; Greece;
Summary/Abstract: Euro-zone leaders agreed this morning on the rough outline of a package of measures designed to end the crisis in the euro-zone. This commentary argues that a central pillar of the package will not work. The so-called ‘first-loss insurance’ of euro-zone sovereign debt relies on an incomplete analysis of the underlying problem and the proposed solution.

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