CEPR Discussion Paper: When Green Meets Green

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[…]

CEPR Discussion Paper: Does Political Partisanship Cross Borders? Evidence from International Capital Flows

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[…]

FRS International Finance Discussion Papers: Financial Stability Governance and Central Bank Communications

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[…]

SSRN Working Paper: Global Financial Cycle, Household Credit, and Macroprudential Policies

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[…]

CEPR Discussion Paper: Systemic Implications of the Bail-In Design

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[…]

CEPR Discussion Paper: Capital Controls, Domestic Macroprudential Policy and the Bank Lending Channel of Monetary Policy

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[…]

CEPR Discussion Paper – Financial Stability Policies and Bank Lending: Quasi-experimental Evidence from Federal Reserve Interventions in 1920-1921

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.[…]

IMF Working Paper: IMF Programs and Financial Flows to Offshore Centers

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[…]