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Crowding out risk: Sovereign debt, banks, and firms’ investments in Italy

Pierluigi Balduzzi, Emanuele Brancati, Fabio Shiantarelli  |  November 9, 2018

“A capital loss on sovereign bonds may have an adverse impact on a bank’s book equity. Whether it does or not depends on whether sovereign bonds are marked to market (which depends, in turn, upon whether they are classified as trading securities, available for sale, or held to maturity) and upon the changing accounting treatment of each category.”

Read the full article on: Vox

 
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