| The European Financial Stability Facility: Another Balance Sheet Manipulation?What if you had to pick one cause of the recent financial crisis? Legal engineering centered around balance sheet manipulation easily qualifies. |
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| The Ireland Case: Sovereign Risk and Black HolesThe assessment of sovereign risk can no longer be modeled as a linear causal chain, running from bond price through yield-to-maturity through the refinancing rate. The recent turbulence in the European government bond market, especially the Irish government bonds, illustrates this point. |
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| Rise of the DragonIn May 2007, a Financial Times editorial stated that the cause of the Association of Southeast Asian Nations’ apparent inability to achieve pre-crisis growth rates was the rise of China as “a vast new competitor with an almost limitless capacity to sell at a lower price.” This is a familiar story surrounding the Asian crisis of the 1990s: either blame the victim (an internal cause) or blame the global architecture (the external story). The truth is not so simple. |
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| Dubai Exposes Risks, Averts DisasterWhen Dubai World declared its debt emergency late last year, worst-case scenarios flashed before risk managers’ eyes. Many had been wary of problems still to play out in commercial real estate or sovereign debt, and over-leveraged, over-built Dubai offered dollops of both. |
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