Too Late to Bail Out the PIIGS?

February 6th, 2014
in econ_news

Econintersect: A recent study at the Minneapolis Fed concludes that debt levels among the PIIGS (Portugal, Ireland, Italy, Greece, and Spain) are so high that it may be too late for such bailouts to be successful in inducing these countries to reduce their debt. The study (using the 1995 bailout of Mexico as the model) was based on the theory that lending freely at a penalty interest rate and on good collateral, an outside party can put an end to a sovereign debt crisis.

Follow up:

[click on image below to read the full study]


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