Bruegel Event Recordings

The debate on how to deal with the sovereign and banking risk loop is at the center of the policy and regulatory debate. There is a widespread awareness that excessive exposures of banks towards sovereigns and vice-versa may be a source of systemic risk, under-rated by the current regulation. At the same time it is not clear how far limiting these exposures may in fact enhance or rather jeopardise global stability, especially given the still very slow pace of the recovery. There is also a widespread debate on the best policy measures to tackle this issue.