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Sovereign exposures in the Portuguese banking system: evidence from an original dataset

Álvaro Pina
Ana Rita Mateus
Publication Year 
JEL Code 
G01 - Financial Crises
G21 - Banks; Other Depository Institutions; Mortgages
H63 - Debt; Debt Management
L32 - Public Enterprises
We present an original dataset on exposures of banks operating in Portugal to the domestic public sector, and document the main dynamics of those exposures against the broader backdrop of public sector indebtedness and financing needs. Built from granular information, our dataset takes account of both bond holdings and loans, and ensures comprehensive coverage of both the banking system and public sector entities, either classified inside or outside general government. Domestic banks, unlike those mostly owned by foreigners, played a key role in financing public sector entities in the most acute stages of the sovereign debt crisis, when access to international capital markets was virtually lost. We present evidence of this role in the cases of the Treasury and of state-owned enterprises.
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