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Monday, August 6

Exit Special

 Someone requested a collection of research reports on the (eventual?) breakup of the eurozone. Here you go. Spread the word and honor MoreLiver's Daily.

Wolfson Economics Prize

Capital Economics - Leaving the euro: A practical guide

Catherine Dobbs - The NEWNEY approach to unscrambling the Euro pdf

Jens Nordvig and Dr Nick Firoozye - Rethinking the European monetary union pdf

Neil Record - Minimising the financial cost, and maximising the economic opportunities, of Euro Exit pdf

Jonathan Tepper - A Primer on the Euro Breakup: Depart, Default, and Devalue as the Optimal Solution pdf

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Fix it or Fixit – Could Finland Be Next? – July 6 / 2012 – Nouriel Roubini

JP Morgan on Finland’s exit - July 20 / 2012alphaville / FT
First leaver has the advantage. Full pdf

Nomura: Currency risk in a Eurozone break-up- Legal Aspects (18-Nov 2011)scribd
15 pages, redenomination risk and the differences between local and foreign law applicability

Analysis: Euro exit talk risks self-fulfilling prophecy (23-Jul-2012) – Reuters

Game theory and euro breakup risk premium  (10-Jul 2012) – BoA / ML (pdf)
What is the Nash equilibrium of this game? The bottom line is that the only stable equilibrium of this game is that Italy exits the euro and, more importantly, it exits already in period 1…Our analysis above suggests that the eurozone is now facing two paths – break up or accept a much weaker EUR. To the extent that the first path is likely to be also associated with a weaker EUR (at least in the transition), it seems that further depreciation of the EUR is inevitable.

The Implications Of Leaving The Euro (Dec 2011)BCG via Zero Hedge

Euro break-up – the consequences (6-Sep 2011)UBS (pdf)
Cost to a periphery country leaving 40-50% of GDP in first year.

Nomura Presents The Fair-Value Of European Currencies In A Euro Breakup Scenario (5-Dec 2011)Zero Hedge
Our estimates suggest significant depreciation risk for a number of eurozone countries in a redenomination scenario (FINLAND 6.7% DEVALUATION)

How Finland Could Exit The Euro In The Long Term (22-Jul-2012) - Goldman Sachs
The likely candidates are countries that are going to be net contributors to any risk sharing arrangements – the fiscally stronger countries, especially those that do not perceive much benefit from the Euro, such as Finland.

An Exit Strategy From the Euro (Jan 2012) – Robert Barro / WSJ
The euro can be phased out the same way Europe's individual currencies were. The bonds of troubled member states would benefit as a result.

State of the union: Can the euro zone survive its debt crisis? (Mar 2011)Economist Intelligence Unit
46 pages

The Tipping Point? Time to call the ECB (Nov 2011)Deutsche Bank
51-slide presentation

The Future of the Eurozone and U.S. Interests (16-Sep 2011)
32 pages. Congressional Research Service’s report, prepared for members and committees of congress. Prepared for Members and Committees of Congress

A Primer on the Euro Breakup (Feb 2012) – Variant Perception
53-page paper

EMU Break-up: Pay now, pay later (1-Dec 2011)ING
40 pages, with scenario analysis of both only Greece exiting or a larger break-up

Endgame (25-Nov 2011)Nomura
Absent a policy response, a euro break-up looks probable not possible