Search results

This paper aims to investigate the long-term relationships of long-term European Monetary Union (EMU) government bond yields. From an asset managers’ or risk managers’ perspective during the euro crisis, the relevance of sovereign credit and redenomination risk became a major issue. Furthermore, it has to be differentiated between core and non-core EMU member countries.

Methods of applied time series analysis are used to investigate EMU government bond yields and EMU government bond yield spreads for Spain, Italy, The Netherlands, Austria and Germany. Both standard unit root testing procedures and breakpoint unit root tests are used to examine cointegrating relationships and structural changes in these relationships.

The empirical results deliver clear evidence for structural shifts in the long-term relationship between German and the two non-core EMU countries (Italy and Spain). The timing of the breaks coincides with the timing of the euro crisis. On the contrary, the results for Austria and The Netherlands are different from the findings for the two non-core countries.

One major limitation of the study is the limited availability of data regarding to the reaction of asset managers or risk managers to the euro crisis. Especially in the context of the discussion with regard to the relevant risk-free rate for investors, this strand of research is relatively new.

A deeper understanding of changes in the long-term relationship between government bond yields and the re-emergence of redenomination risk is important for asset managers and risk managers in the financial services industry. This is especially true for German life insurers.

The study provides various empirical contributions to the literature on the euro crisis and sovereign credit risk. First, previous results with regard to the structural changes in the long-term relationship between German and Spanish, German and Italian, German and Austrian as well as Germany and Dutch government bond yields are confirmed using unit root breakpoint tests. Second, investigating the autoregressive coefficient and the timing of the breaks delivers evidence that non-core countries have been more exposed to the fear of redenomination risk. Third, we raise the question which risk free interest rate is relevant for the affected countries.

This paper aims to briefly review the literature on interest rate convergence and the European debt crisis with a special focus on the current fiscal problems of some governments in Europe.

Relevant empirical papers are identified and reviewed focusing on time series analysis techniques.

The introduction of the euro has caused interest rate convergence among European Monetary Union (EMU) government bond yields. However, now sovereign credit risk and possibly even redenomination risk have caused divergences in European bond markets.

A major limitation is that a relatively new field of the literature is surveyed. However, there are enough papers of relevance. This review paper could therefore be helpful in finding new approaches for additional empirical research examining the EMU bond market.

The results of empirical studies in a relatively new field of the literature are summarized. There meanwhile are some relevant papers. A brief survey of the results of these papers is provided. Important empirical findings with regard to interest rate convergence, sovereign credit risk and redenomination risk in the EMU are discussed and evaluated. The review is especially helpful for researchers and practitioners in the field of managerial finance and risk managers in the financial services industry.

This research aims to focus on what has happened in light of the Greece legal crisis in terms of international contracts and what legal situations have arisen.

This research focuses on what has happened in light of the Greek legal crisis in terms of international contracts and what legal situations have arisen. The overall situation in relation to international contracts and risk mitigation is discussed to analyze the efforts that have been made. The state of affairs in the country with regard to facilitating financial trade and enabling Greeks to send payments abroad or at the rate they need to is also explored.

The effects of financial crisis on international trade contracts as they relate to commercial businesses without taking into consideration the wider contractual obligations that Greece, as a country, have already defaulted on. The crux of the current crisis is the fact that Greece did not stick to the commitments it made to the European Union when it joined the eurozone and took on euro as their currency, replacing the drachma. It is important to understand that due to the scope of the economic crisis in the Greece, it is not simply the other contractual party’s creditworthiness and trustworthiness that are at issue, it is their ability to keep any promises in whatever climate arises in their country.

The study is based on the financial crisis in Greek. Further research is needed to investigate the applicability of the findings in different contexts.

The study findings are believed to be valuable for international commercial contracts with regard to the Greek debt crisis in discussing the financial legal situation, facilitating trade and enabling Greeks to send payments abroad or at the rate they need. The study contributes to a better understanding of international commercial contract system.

Poland has made rapid economic advancement since introducing its shock therapy program January 1,1990. Inflation is now below 22 percent and real growth exceeds 5.1 percent. Poland's future will be highly dependent on the development of its financial institutions. The commercial banks that had been branches of the National Bank of Poland and several other major banks are leading the privatization process. Five banks have been privatized and others will follow shortly. Cooperative — twinning — arrangements are being developed to provide international banking expertise and financial support for Poland's commercial banks. The profit maximizing financial institutions will be the primary vehicles to fund the development of Poland's market‐based economy. The privatized institutions will support the planned initial public offerings and joint business arrangements that are developing with western companies.

Fair value issues remain central to the pace of convergence in international accounting standards. This article identifies a fundamental issue at the root of the fair value debate, places the issue in an international and historical context, and recommends that standard-setters work to rationalize principles of accounting for money.