The sovereign-bank nexus continues to endanger the stability of the euro area. We present a proposal how to mitigate spillovers of risks from sovereigns to banks. It encompasses risk-based large exposure limits and risk-adequate capital requirements, with the large exposure limits being most important – both conceptually and empirically. Based on a recent snapshot of […]
Niklas Gadatsch joined the staff of the German Council of Economic Experts as economist for financial markets in March 2014. He holds a doctorate in economics (Dr. rer. pol.) from WHU – Otto Beisheim School of Management and a degree in economics (Diplom-Volkswirt) from the University of Konstanz. His research interests include financial markets and applied macroeconomics.