This paper develops a market-based approach to implement so called Eurobonds, i.e. common sovereign debt securities of European Monetary Union (EMU) countries. By applying an asset-backed security (ABS) approach positive implications of a common bond can be achieved and negative incentives (e.g....

The European Stability Mechanism (ESM) is the permanent crisis resolution mechanism for euro area countries. We analyze the costs of the current (suboptimal) refinancing design of the ESM and evaluate an alternative asset-backed securities (ABS) structure under different scenarios. Our...

In the literature on currency and banking crises it has become the standard procedure to distinguish pure currency crises, pure banking crises and combined ("twin") currency and banking crises. We show theoretically and empirically that a similar differentiation should be chosen with regard to...