Banks’ Home sovereign exposures

This note prepared by Economic Governance Support Unit gives an overview of Banks' Home sovereign exposures.

The financial crisis drew attention to the problem of the 'sovereign-bank' nexus: costly rescue operations for banks caused significant increases of public debt in some Member States, while some banks became increasingly vulnerable to a sovereign default via their investment in sovereign bonds. From a systemic stability point of view, the financial standing of banks and the countries in which they operate should hence become less interdependent.

• Primary Source