Europe’s fiscal outlook appears in some ways worse today than in March 2012, potentially raising the prospect of financial shocks and higher credit default risks.
Greece again finds itself on an economic precipice, with CDS spreads nearing a level on par with last summer’s crisis. A look at potential short- and long-term consequences.
Equity and currency markets seem less sensitive to the risk of Greek contagion than in the past. Are markets underpricing risks?
Greece remains exposed to the possibility of a sovereign default and the reintroduction of the drachma, but three historical case studies suggest that the former need not induce the latter.
Investors seemed to underprice the risk of the Swiss franc de-pegging from the euro by more than ten standard deviations. What does this mean for other pegged currencies?