Author(s):Barry Eichengreen, Ricardo Hausmann, and Ugo Panizza Date:November 2022 Abstract: Notwithstanding announcements of progress, “international original sin” (the denomination ofexternal debt in foreign currency) remains a persistent phenomenon in emerging markets.Although some middle-income countries have succeeded in developing markets in local-currencysovereign debt and attracting foreign investors, they continue to hedge their currency exposuresthrough transactions with[…]

Author(s):Josefine Quast Date:July 2022 Abstract: Basel III credit-to-GDP gaps are used to assess whether aggregate credit is excessive or not and inform macroprudential policymaking. Yet, estimates from Basel III’s prescribed detrending procedure are prone to continuous reevaluations that do not reflect changes in the data and exceed commonly discussed end-of-sample biases from converging one- and[…]

Author(s):Barry Eichengreen and Orkun Saka Date:December 2022 Abstract: Using hand-collected data spanning more than a decade on European banks’ sovereign debt portfolios, we show that the trust of residents of a bank’s countries of operation in the residents of a potential target country of investment has a positive, statistically significant, and economically important association with[…]

Author(s):Claudio Borio, Ilhyock Shim, and Hyun Song Shin Date:December 2022 Abstract: Since the 2008–9 Great Financial Crisis, major advanced economies (AEs) have used monetary and macroprudential policies to achieve macroeconomic and financial stability. Emerging market economies (EMEs) have, in addition, combined interest rate tools with FX intervention, macroprudential policy and, sometimes, capital flow management measures[…]