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Monday, November 19, 2007

"This Would be the Mother of All Financial Crises"

Barry Eichengreen argues that:

Adopting the euro is effectively irreversible. Leaving would require lengthy preparations, which, given the anticipated devaluation would trigger the mother of all financial crises. National households and firms would shift deposits to other euro-area banks producing a system-wide bank run. Investors, trying to escape would create a bond-market crisis. Here is what the train wreck would look like.

The description is at "Eurozone breakup would trigger the mother of all financial crises."

    Posted by on Monday, November 19, 2007 at 12:15 AM in Economics | Permalink  TrackBack (1)  Comments (22)

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    » BizLinks | 11.19.07 from Loren Steffy

    OPEC comment drives oil close to $95-- and on the consumer front -- Gas prices up 13 cents in last 2 weeks. And there's few signs that things may get better: Oil Officials See Limit Looming on Production ($)... [Read More]

    Tracked on Monday, November 19, 2007 at 07:04 AM


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