Negative Feedback Loop Between the Sovereign Risk and the Banking Risk: Origins, Remedies and Outcome

Dublin, Ireland

March 2, 2012



Co-organized with the Euro50 group and the support of the Irish Ministry of Finance, this conference addressed the key topics of sovereign spillovers and negative interactions between the banking risk and the sovereign risks, a salient feature of Eurozone crisis. The goal was to better understand this negative loop in order to reduce risks of financial fragmentation in Europe. The keynote speech was delivered by Michael Noonan, Ireland’s Minister of Finance, and the panelists, including several deputy governors, explored the case of sovereign debt affecting banks. It was agreed that the road to recovery in the financial sector needed close assessment of policy options, which were elaborately discussed during last session of the conference in a roundtable format also aimed at summarizing the outcomes of the conference.



  • Alexander K. SWOBODA: Professor of International Emeritus, The Graduate Institute of International and Development Studies
  • Arnor SIGHVATSSON: Deputy Governor, Central Bank of Iceland
  • Athanasios ORPHANIDES: Governor, Central Bank of Cyprus
  • Bernd BRAASCH: Director, Financial Stability Department, Deutsche Bundesbank
  • Eamon GILMORE: Deputy Prime Minister and Minister for Foreign Affairs and Trade, Ireland
  • Edmond ALPHANDERY: Chairman, Euro50 Group
  • Erik NIELSEN: Chief Economist, UniCredit
  • Fabio PANETTA: Managing Director for the Eurosystem and Financial Stability, Banca d’Italia
  • Gillian EDGEWORTH: Chief EEMEA Economist, UniCredit Bank London
  • John CORRIGAN: Chief Executive of the NTMA
  • John FITZGERALD: Research Professor, ESRI
  • John MORAN: Second Secretary General and Head of Banking, Ministry of Finance, Ireland
  • Jorge BRAGA DE MACEDO: President, Tropical Research Institute
  • Liliana ROJAS SUAREZ: Senior Fellow, Center for Global Development
  • Mahmood PRADHAN: Deputy Director, European Department, IMF
  • Marc UZAN: Executive Director, Reinventing Bretton Woods Committee
  • Michael NOONAN: Minister for Finance, Ireland
  • Pablo DUIDOTTI: Professor of Economics, Torcuato Di Tella University, Argentina
  • Patrick HONOHAN: Governor, Central Bank of Ireland
  • Philip LANE: Professor of International Economics, Trinity College, Dublin
  • Stefan GERLACH: Deputy Governor, Central Bank of Ireland
  • Turalay KENC: Deputy Governor, Central Bank of Turkey

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