Author(s): Moritz Schularick, Lucas Ter Steege and Felix Ward Date: May 2020 Abstract: Can central banks defuse rising stability risks in financial booms by leaning against the wind with higher interest rates? This paper studies the state-dependent effects of monetary policy on financial crisis risk. Based on the near-universe of advanced economy financial cycles since[…]

Author(s): Michael R. Wickens Date: May 2020 Abstract: A feature of the financial crisis rarely mentioned in the academic literature is that forward interest rates remained persistently higher than future spot rates. Yet according to the expectations hypothesis forward interest rates are unbiased predictors of future spot rates. More general theories attribute the forecast errors[…]

Author(s): Pauline Gandré, Mike Mariathasan, Ouarda Merrouche and Steven Ongena Date: May 2020 Abstract: We investigate regulatory arbitrage during the G20’s global derivatives market reform. We handcollect comprehensive data on the staggered reform process and show that its progress is primarily driven by structural time-invariant factors. Following the reform banks shift up to 70 percent[…]