[Question] For a long time Italy was able to stay competitive through the devaluation of its own currency. Now, with the euro, that strategy can no longer be pursued and its economic difficulties are more apparent. [Answer] The birth of the euro has put an end to intra European currency crises, exchange markets and interest rates market tensions and bond market risk premia.
The proposal is to use a synthetic security build with sovereign debt of all countries and tranched, which, if created and accepted by the market, would provide a safer asset that banks could use to substitute sovereign debt of a particular country.8 All the references I made illustrate how good research is the foundation of good policy.