The markets have traditionally not looked too carefully at sovereign debt. But that seems to be changing. At a panel at the World Economic Forum in Davos, people were asked to vote what was most likely to cause the next crisis. More than 50 percent of them, 50.7 to be precise, named sovereign debt far ahead of protectionism, 37.3%, and over-regulation, 12%.
Another interesting tit-bit from Davos is this quote from Ken Rogoff, a former IMF chief economist who the Tories greatly admire, ‘If you took away the props of the (European Central Bank) and the (International Monetary Fund) half a dozen countries in Europe would fail tomorrow’.