Financial contagion grips peripheral EU countries, sparking instability in global markets.
The study looked at how bond interest rates in five European countries were affected by the euro-debt crisis. They found that factors like stock market returns, interest rates, and debt ratings had a big impact on bond rates. Spain and Italy were less affected by the crisis, while Ireland, Greece, and Portugal were hit the hardest. This shows that financial problems in one country can spread to others, causing instability in the global financial system.