Sovereign concerns

Sovereign concerns

Category: Risk Management

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Sovereign default and re-denomination risk remain

European structured finance trading and issuance trends have been impacted by wider concerns stemming from the European sovereign debt crisis - particularly towards the end of 2011, when spreads moved steadily wider and issuers shied away from the primary market. While the market appears to have started 2012 with renewed confidence, several unfavourable scenarios remain possible, such as a sovereign default and currency redenomination within the eurozone.

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