Exposure to sovereign risk may limit banks’ ability to attract deposits – IMF paper
Research shows non-linear relationship between exposure to sovereign risk and deposit outflows
A paper published by the International Monetary Fund has suggested exposure to sovereign risk may have limited the ability of banks in Europe to attract deposits between 2006 and 2011.
In their paper Sovereign Risk and Deposit Dynamics: Evidence from Europe, David Grigorian and Vlad Manole use an extension of a common market discipline framework to measure the perception of sovereign risk and the impact on deposit-taking dynamics.
Their results show that between 2006 and 2011 exposure of the
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