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European debt crisis

The crisis of confidence in the government debt of several euro-area countries that unfolded after 2009.

How to read the number

The union's design left member states with a shared central bank and no printing press of their own: borrowing effectively in a foreign currency, a state cannot inflate its debt away and can become insolvent.

When the metric lies

Banks held their own government's bonds at a zero risk weight in the rules — an asset risk-free by regulation turned out to be the source of the crisis.

Also known as: eurozone debt crisis

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