Author(s): M. Ayhan Kose, Franziska L. Ohnsorge, Carmen M. Reinhart and Kenneth S. Rogoff Date: September 2021 Abstract: Debt in emerging market and developing economies (EMDEs) is at its highest level in half a century. In about nine out of 10 EMDEs, debt is higher now than it was in 2010 and, in half of[…]
Author(s): Hans Degryse, Roman Goncharenko, Carola Theunisz, Tamas Vadasz Date: September 2021 Abstract: We investigate whether and how the environmental consciousness (greenness for short) of firms and banks is reflected in the pricing of bank credit. Using a large international sample of syndicated loans over the period 2011-2019, we find that firms are indeed rewarded[…]
Author(s): Elisabeth Kempf, Mancy Luo, Larissa Schaefer and Margarita Tsoutsoura Date: September 2021 Abstract: Does partisan perception shape the flow of international capital? We provide evidence from two settings, syndicated corporate loans and equity mutual funds, to show that ideological alignment with foreign governments affects the cross-border capital allocation by U.S. institutional investors. Moreover, we[…]
Author(s): J. Scott Davis and Eric van Wincoop Date: September 2021 Abstract: We develop a theory to account for changes in prices of risky and safe assets and gross and net capital flows over the global financial cycle (GFC). The multi-country model features global risk-aversion shocks and heterogeneity of investors both within and across countries.[…]
Author(s): Juan M. Londono, Stijn Claessens and Ricardo Correa Date: September 2021 Abstract: We investigate how central banks’ governance frameworks influence their financial stability communication strategies and assess the effectiveness of these strategies in preventing a worsening of financial cycle conditions. We develop a simple conceptual framework of how central banks communicate about financial stability[…]
Author(s):Mircea Epure, Irina Mihai, Camelia Minoiu and José-Luis Peydró Date: September 2021 Abstract: We show that macroprudential policies dampen the impact of global financial conditions on local credit cycles. For identification, we exploit exogenous variation in the U.S. VIX and household and business credit registers in a small open economy, where banks depend on foreign[…]
Authors: Doyne Farmer, Charles A Goodhart and Alissa M. Kleinnijenhuis Date: September 2021 Abstract: The 2007-2008 financial crisis forced governments to choose between the unattractive alternatives of either bailing out a systemically important bank (SIB) or allowing it to fail disruptively. Bail-in has been put forward as an alternative that potentially addresses the too-big-to-fail and contagion risk[…]
Authors: Andrea Fabiani, Martha Lopéz Piñeros, José Luis Peydró and Paul Soto Date: September 2021 Abstract: We study how capital controls and domestic macroprudential policy tame credit supply booms, respectively targeting foreign and domestic bank debt. For identification, we exploit the simultaneous introduction of capital controls on foreign exchange (FX) debt inflows and an increase[…]
Authors: Kilian Rieder Date: August 2021 Abstract: I exploit a single natural experiment to estimate the comparative causal effects of different financial stability policies on bank-level credit. In 1920, four Federal Reserve Banks hiked their interest rate indiscriminately to safeguard financial stability. Another four Reserve Banks employed targeted rate action aimed at over-leveraged banks instead.[…]
Author(s): Shekhar Aiyar and Manasa Patnam Date: May 2021 Abstract: This paper examines whether IMF lending is associated with increases in outflows to offshore financial centers (OFCs), known for bank secrecy and asset protection, relative to other international destinations. Using quarterly data from the BIS on bilateral bank deposits, we are unable to detect any[…]
