The effects of the Euro-zone debt crisis

The following dissertation attempts to establish whether this crisis could have been predicted and how it has affected the bond market. Subsequently, we can get a better idea of what will happen in the future to these countries and investigate the actions that might need to be taken to fix this problem. This area of research is the biggest issue at the moment in the Banking and Finance industry, and also the world. Therefore investigating this situation gives a good insight of what the future holds for the financial services industry. More precisely, this research starts by giving an overview of 'sovereign debt' and 'debt crises' in general. It proceeds by discussing the events in the current Euro-zone debt crisis. The objective of this study is reached by using regression analysis to determine which of the factors that were used to predict past crises, are still able to predict the present debt crisis. Specifically, this dissertation focuses on Portugal, Ireland, Italy, Greece and Spain (PIIGS) as they are the focal point of the current crisis. In addition, it also analyses the effect that this crisis had on the long term bond market yields. The regression analysis consists of running an equation of the dependent variable, the debt-to-GDP ratio, against a number of regressors. Such explanatory variables include government debt, real GDP, inflation, current account balance, foreign direct investment, total reserves, unemployment and several dummy variables for banking crisis periods, years in presidential election and crisis period.

Grantor dc:publisher.institution

University of Malta

Year dc:date.issued

2012

• Eurozone
• Financial crisis -- Europe
• Bond market -- Europe

Statement dc:rights

• info:eu-repo/semantics/restrictedAccess

Language dc:language.iso

en

Repository record dc:identifier.uri

https://www.um.edu.mt/library/oar//handle/123456789/5438

OAI identifier oai:identifier

oai:www.um.edu.mt:123456789/5438