Credible fiscal plans reduce pressure on sovereign bond market, study finds
ECB paper analyses France, Italy and UK data between 1993 and 2011
Having credible fiscal plans can improve market expectations and help reduce the pressure on sovereign bond markets, according to a working paper published by the European Central Bank (ECB) today.
In How do financial institutions forecast sovereign spreads?, Jacopo Cimadomo, Peter Claeys and Marcos Poplawski-Ribeiro used monthly survey forecasts for France, Italy and the UK between 1993 and 2011 to test whether respondents consider economic fundamentals "significant drivers of the expected bond
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