Eurozone sovereign debt crisis has increased financial fragmentation, paper argues

Risk premia for corporate bonds differ according to country of origin, researchers say

The European sovereign debt crisis has “reversed the process of financial integration” in the eurozone, a working paper published by the Banque de France argues.

In Measuring financial fragmentation in the Euro area corporate bond market, Guillaume Horny, Simone Manganelli and Benoit Mojon compare spreads on German, French, Italian and Spanish companies’ bonds to those on the German Bund.

The authors use data on individual corporate bonds issued on behalf of non-financial corporations between

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