Nina Boy, former doctoral researcher at PRIO, received an award worth $700 from the Society for the Advancement of Socio-Economics (SASE) on the occasion of the 25th SASE Annual Conference "States in Crisis" to take place in Milan, 27-29 June 2013. The awards committee selected her paper Sovereign Credit: A Financial Concept of Security as an outstanding submission.
The article traces the evolution of sovereign debt from a highly unsafe asset in Medieval times to the safest asset of the financial system, both the most common form of collateral and destination of a 'flight to safety' in times of market distress. It concludes with some reflections on the sovereign debt crisis which has brought the somewhat unconscious yet fundamental underwriting role of sovereign credit into light. The novelty of a crisis of 'advanced' economies challenges the concept of the risk-free asset as such, possibly marking the end of a century-old form of sovereign safety.
