BIS Working Paper – How does fiscal policy affect the transmission of monetary policy into cross-border bank lending? Cross-country evidence

Author(s):Swapan-Kumar Pradhan, Előd Takáts and Judit Temesvary Date:November 15, 2024 Abstract: We use a rarely accessed BIS database on bilateral cross-border bank claims by bank nationality to examine the interaction of monetary and fiscal policies. We find significant interactions: the transmission of the monetary policies of major currency issuers is significantly influenced by the fiscal[…]

CEPR Discussion Paper – Bank Geographic Diversification and Funding Stability

Author(s):Sebastian Doerr Date:November 11, 2024 Abstract: The recent banking turmoil has renewed focus on banks’ branch networks and deposit taking activity. This paper provides novel evidence that the geographic diversification of banks’ deposit base enhances their funding stability. I establish that banks with greater diversification exhibit higher dispersion in deposit growth rates across their branches;[…]

BIS Working Paper – Trade credit and exchange rate risk pass through

Author(s):Bryan Hardy, Felipe Saffie & Ina Simonovska Date:8 October 2024 Abstract: Large firms borrow in foreign currency and are net providers of trade credit to firms in their supply chains. We model the transmission of exchange rate risk via firm balance sheets along the supply chain. Trade credit loosens borrowing constraints and allows for higher production. Furthermore, firms[…]

NBER Working Paper – Failing Banks

Author(s):Sergio A. Correia, Stephan Luck & Emil Verner Date:September 2024 Abstract: Why do banks fail? We create a panel covering most commercial banks from 1865 through 2023 to study the history of failing banks in the United States. Failing banks are characterized by rising asset losses, deteriorating solvency, and an increasing reliance on expensive non-core[…]

New York FED Staff Reports – Failing Banks

Author(s):Sergio Correia, Stephan Luck, and Emil Verner Date:September 2024 Abstract: Why do banks fail? We create a panel covering most commercial banks from 1865 through 2023 to study the history of failing banks in the United States. Failing banks are characterized by rising asset losses, deteriorating solvency, and an increasing reliance on expensive non-core funding.[…]

CEPR Discussion Paper – International Investment Income: Patterns, Drivers, and Heterogeneous Sensitivities

Author(s):Giovanni Donato, Cédric Tille Date:July 2024 Abstract: Financial globalization has led to a large increase in international asset holdings. While the rise of associated dividend and interest flows has until now been muted by the decreasing trend in interest rates, this pattern could change, leading to a larger role of investment income flows in the[…]

CEPR Discussion Paper – Intermediary Balance Sheet Constraints, Bond Mutual Funds’ Strategies, and Bond Returns

Author(s):Mariassunta Giannetti, Jotikasthira Chotibhak, Andreas Rapp, Martin Waibel Date:July 2024 Abstract: We show that after the introduction of the leverage ratio constraints on bank-affiliated dealers, bond mutual funds have engaged in more liquidity provision in investment-grade corporate bonds and that the performance of funds with liquidity-supplying strategies has benefited. Not only have regulations transferred profits[…]

CEPR Discussion Paper – The Global Financial Cycle: Quantities versus Prices

Author(s):Eugenio Cerutti, Stijn Claessens Date:July 2024 Abstract: We quantify the importance of the Global Financial Cycle (GFCy) in domestic credit and various local asset prices and compare it with that in capital flows. Using 2000-2021 data for 76 economies and a simple methodology, we find that each respective series’ common factor and conventional US GFCy-drivers[…]

NBER Working Paper – Sovereign Haircuts: 200 Years of Creditor Losses

Author(s):Clemens M. Graf von Luckner, Josefin Meyer, Carmen M. Reinhart & Christoph Trebesch Date:June 2024 Abstract: We study sovereign external debt crises over the past 200 years, with a focus on creditor losses, or “haircuts”. Our sample covers 327 sovereign debt restructurings with external private creditors over 205 default spells since 1815. Creditor losses vary[…]