Introduction

Abstract

In 2007 global financial markets began to suffer an unprecedented succession of disruptions, breakdowns and conflagrations that nearly broke the back of the world economy. The damage was so deep and so severe that the crisis mutated like a virus as it infected different parts of the global financial system. While at this writing its intensity has gradually diminished, periodic flare-ups have served as stark warnings that its harmful potential is not yet fully under control. In fact, the crisis has morphed so often that it has proved impossible to identify it by a single moniker, as was the case for the “dot-com” crash or the Long-Term Capital Management (LTCM) crisis. The definition of “subprime- crisis, which seemed to fit perfectly at first, now sounds misleadingly diminutive as disruptions have spread like wildfire to a much wider range of asset markets, including sovereign bond markets in the Eurozone. And it is not over yet.