What is the Sovereign Bank Doom Loop?

What is the Sovereign Bank Doom Loop?

The sovereign bank doom loop has been one of the most discussed, analysed and researched topics since the Global Financial Crisis. In this second video of the series, Keith explains what is the sovereign bank doom loop, its impact, and what regulators are doing to try to mitigate this risk.
Overview

This is the idea whereby Banks and Sovereigns are inseparably exposed to each other. This is seen through weak, over-indebted governments and their relationship to the solvency of their banks and vice versa. This concept was evident during the Global Financial Crisis.

Key learning objectives:

  • Discuss the relationship between Banks and Sovereigns, and the consequent impact on the economy

  • Explain the improvements in Bank regulation to mitigate ‘SBDL’ and evaluate their success

  • Identify ways to potentially break the sovereign bank doom loop.

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Summary
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Expert
Keith Mullin

Keith Mullin

Keith is the founder and director of KM Capital Markets, a media and thought-leadership consultancy. He spent the past 35 years working in specialist capital markets media and has had a ring-side seat at all of the major market events. Prior to setting up KM Capital Markets in 2017, Keith worked at Thomson Reuters.

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