As a starting point, we look at publications from investment banks and at the development of interest rate swap spreads around key fiscal policy events. The euro interest rate swap spread seems to be a good indicator of the relative risk of private versus government long-term bonds versus the private inter-bank market. The main result of our review of investment bank newsletters and notes is that market participants closely observe and contribute to the debate on the SGP and its implementation. But they do not share a unanimous view on specific aspects of institutional credibility and the optimal implementation. Correspondingly, we only find a significant.
