Bond Yields and Bailout Guarantees: Regional Debt Markets in Germany
Series
FEN Capital Markets: Asset Pricing & Valuation eJournal
Type
working paper
Date Issued
2012
Author(s)
Abstract
The paper investigates yield spreads in German regional bond markets in the years of 2005-2010. As the paper shows, spreads of regional bonds over federal bonds widened during the crisis. At the same time, co-movements of regional bond yields strengthened. This observation is contrary to the yield-behavior of sovereign bonds in EMU. Potential explanations of this phenomenon are discussed along with implications for the introduction of the common issuance of federal and regional debt in form of "Deutschlandbonds".
Language
English
Keywords
Bailouts
Bond Yields
Subnational Debt Markets
HSG Classification
contribution to scientific community
HSG Profile Area
SEPS - Economic Policy
Refereed
No
Publisher
SSRN
Publisher place
http://papers.ssrn.com/sol3/JELJOUR_Results.cfm?form_name=journalbrowse&journal_id=1508951
Number
Vol. 4 No. 168, 10/31/2012
Subject(s)
Division(s)
Eprints ID
217670