Who bailed out who? “German banks could get money at the lower rates in the euro zone and invest it for a decade in higher yielding assets: for much of the 2000s, those were not only American toxic assets but the sovereign bonds of Greece, Ireland, Portugal, Spain, and Italy. For ten years this German version of the carry trade brought substantial profits to the German banks — on the order of hundreds of billions of euros ... The German advantage, relative to all other countries in terms of cost of funding, has developed into an exorbitant privilege. French banks exploited a similar advantage, given their major role as financial intermediaries between AAA-rated countries and higher yielding debtors in the euro area.” Constantin will be with us on Sunday, Ballyhea 11.30am, week 200. trueeconomics.blogspot.ie/2014/12/27122014-geography-of-euro-area-debt.html?spref=fb
Posted on: Sat, 27 Dec 2014 13:28:05 +0000
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