As President Franklin D Roosevelt famously once observed: “The only thing we have to fear is fear itself”. It is an aphorism that policymakers should take note of, given the findings of research by Philippe Bacchetta and Eric van Wincoop into the causes of the Great Recession.
How secure are Europe’s financial institutions? What are the chances of another crisis? Eric Jondeau and Michael Rockinger create a model for assessing the ability of European financial institutions, industry sectors, and countries, to withstand market shocks.