A Socialization of Short-Term Risk

Michael Spence, professor of economics at New York University and Nobel Prize winning economist, looks on during an interview concerning the European debt crisis. Photograph by Jerome Favre/Bloomberg

Buying time for reform to work requires socialization of short-term risk. There is no other way to keep bond yields under control and banks functioning, and there is no ironclad guarantee that the reform programs needed to do the job will be approved.

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