CEPR Discussion Paper – Banks’ Systemic Risk and Monetary Policy

Authors: Ester Faia, and Soeren Karau Date: January 2019 Abstract: The risk-taking channel of monetary policy acquires relevance only if it affects systemic risk. We find robust evidence of a systemic risk-taking channel using cross-country and time-series evidence in panel and proxy VARs for 29 G-SIBs from seven countries. We detect a significant role for[…]

CEPR Discussion Paper – The Trials of the Trilemma: International Finance 1870-2017

Authors: Barry Eichengreen, and Rui Esteves Date: January 2019 Abstract: In this paper we survey the history of international finance spanning a century and a half. We start by characterizing capital flows in the long run, organizing our discussion around six facts relating to the volume and volatility of capital flows, measured in both net[…]

BIS Working Paper – Global Banking, Financial Spillovers, and Macroprudential Policy Coordination

Authors: Pierre-Richard Agénor and Luiz Awazu Pereira da Silva Date: January 2019 Abstract: The gains from international macroprudential policy coordination are studied in a two-region, core-periphery macroeconomic model with imperfect financial integration and cross-border banking. Financial frictions occur at two levels: between firms and banks in each region, and between periphery banks and a global[…]

IMF Working Paper: Can Good Governance Lower Financial Intermediation Costs?

Authors: Mariusz Jarmuzek and Tonny Lybek Date:December 2018Abstract: This paper argues that better governance practices can reduce the costs, risks and uncertainty of financial intermediation. Our sample covers high-, middle- and low-income countries before and after the global financial crisis (GFC). We find that net interest margins of banks are lower if various governance indicators[…]

IMF Working Paper – The Micro Impact of Macroprudential Policies: Firm-Level Evidence

Authors: Meghana Ayyagari, Thorsten Beck and Maria Soledad Martinez Peria Date: December 2018 Abstract: Combining balance sheet data on 900,000 firms from 48 countries with information on the adoption of macroprudential policies during 2003-2011, we find that these policies are associated with lower credit growth. These effects are especially significant for micro, small and medium[…]

IMF Working Paper: Borrowing Costs and The Role of Multilateral Development Banks: Evidence from Cross-Border Syndicated Bank Lending

Authors: Daniel Gurara, Andrea Presbitero and Miguel Sarmiento Date: December 2018 Abstract: Cross-border bank lending is a growing source of external finance in developing countries and could play a key role for infrastructure financing. This paper looks at the role of multilateral development banks (MDBs) on the terms of syndicated loan deals, focusing on loan[…]

IMF Working Paper: China’s Bond Market and Global Financial Markets

Authors: Eugenio M Cerutti and Maurice Obstfeld Date: December 2018 Abstract: A cross-country comparative analysis shows that there is substantial room for further integration of China into global financial markets, especially in the case of the international bond market. A further successful liberalization of the Chinese bond market would encompass not only loosening bond market[…]

BIS Working Paper: Gross capital flows by banks, corporates and sovereigns

Authors: Stefan Avdjiev, Bryan Hardy, Sebnem Kalemli-Ozcan and Luis Servén Date: December 2018 Abstract: We construct a new data set of quarterly international capital flows by sector, with an emphasis on debt flows. Using our new data set, we establish four facts. First, the co-movement of capital inflows and outflows is driven by inflows and[…]

BIS Working Paper: Foreign currency borrowing, balance sheet shocks and real outcomes

Authors: Bryan Hardy Date: November 2018 Abstract: Emerging market firms frequently borrow in foreign currency (FX), but their assets are often denominated in domestic currency. This behavior leads to an FX mismatch on firms balance sheets, which can harm their net worth in the event of a depreciation. I use a large, unanticipated, and exogenous[…]

IMF Working Paper: House Price Synchronicity, Banking Integration, and Global Financial Conditions

Authors: Adrian Alter, Jane Dokko and Dulani Seneviratne Date: November 2018 Abstract: We examine the relationship between house price synchronicity and global financial conditions across 40 countries and about 70 cities over the past three decades. The role played by cross-border banking flows in residential property markets is examined as well. Looser global financial conditions[…]