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Federal Reserve Bank of San Francisco
FRBSF Economic Letter
Are U.S. corporate bonds exposed to Europe?
Galina Hale
Elliot Marks
Fernanda Nechio
Abstract

The European sovereign debt crisis has created tensions in the global corporate debt market. Investors increasingly hold international assets and companies issue bonds in many countries. Thus, shocks to the European corporate bond market are readily transmitted to the U.S. corporate bond market. However, the rate of transmission is less than one-to-one. Moreover, different segments of the U.S. market vary in the magnitude of their response to European shocks. In particular, higher-rated nonfinancial borrowers and lower-rated financial borrowers are less affected on average.


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Galina Hale & Elliot Marks & Fernanda Nechio, "Are U.S. corporate bonds exposed to Europe?", Federal Reserve Bank of San Francisco, FRBSF Economic Letter, number 17, 2012.
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Keywords: Corporate bonds
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