Author(s): Albert Banal-Estanol, Julian Kolm, Gyöngyi Lóránth Date: May 2021 Abstract: We study how bank resolution regimes affect investment. Banking groups create financing synergies by transferring excess financing capacity across units and lowering bankers’ agency rents. Single-point-of-entry (SPOE) resolution mutualizes losses, which permits ex-post efficient continuation of weaker units following negative shocks, but can prevent[…]

Author(s): Christian Friedrich, Pierre Guerin and Danilo Leiva Date: May 2021 Abstract: We propose a new strength measure of the global financial cycle by estimating a regime-switching factor model on cross-border equity flows. We then assess how this measure affects monetary policy independence, defined as central banks’ responses to exogenous changes in inflation. We show[…]

Author(s): Franklin Allen and Ansgar Walther Date: May 2021 Abstract: This paper studies the links between financial stability and the architecture of financial systems. We review the existing literature and provide organizing frameworks for analyzing three empirically important aspects of financial architecture: The rise of non-bank financial intermediaries, the regulatory response to these structural changes,[…]