Author(s):Desislava Andreeva, Andra Coman, Mary Everett, Maren Froemel, Kelvin Ho, Simon Lloyd, Baptiste Meunier, Justine Pedrono, Dennis Reinhardt, Andrew Wong, Eric Wong, and Dawid Żochowski Date:January 2023 Abstract: We study the effects of negative interest rate policies (NIRP) on the transmission of monetary policy through cross-border lending. Using bank-level data from international financial centres (IFCs)[…]

Author(s):Wenqian Huang, Angelo Ranaldo, Andreas Schrimpf, and Fabricius Somogyi Date:February 2023 Abstract: We study dealers’ liquidity provision in the currency market. We show that at times when dealers’ intermediation capacity is constrained their cost of liquidity provision increases disproportionately relative to dealer-provided volume. As a result, the elasticity of dealers’ liquidity provision drops by at[…]

Author(s):Clemens Graf von Luckner, Carmen Reinhart, and Kenneth Rogoff Date:January 2023 Abstract: This paper employs high frequency transactions data on the world’s two oldest and most extensive centralized peer-to-peer Bitcoin markets, which enables trade in the currencies of more than 160 countries. We develop an algorithm that allows us, with high probability, to detect “crypto[…]

Author(s):Niall Ferguson, Martin Kornejew, Paul Schmelzing, and Moritz Schularick Date:January 2023 Abstract: This paper studies the evolution of central bank balance sheets over the past 400 years across 17 major economies. The size of central bank balance sheets has varied substantially over time relative to economic and financial activity. Major balance sheet expansions were initially[…]

Author(s):Linda S. Goldberg & Signe Krogstrup Date:January 2023 Abstract: The risk sensitivity of international capital flow pressures is explored using a new Exchange Market Pressure index that combines pressures observed in exchange rate adjustments with model-based estimates of incipient pressures that are masked by foreign exchange interventions and policy rate adjustments. The sensitivity of capital[…]

Author(s):Asli Demirguc-Kunt, Alvaro Pedraza, Fredy Pulga, and Claudia Ruiz-Ortega Date:December 2022 Abstract: What is the response of bank foreign subsidiaries to climate policy in their host countries? This paper finds that global banks with high environmental performance increase their presence in countries after local authorities strengthen their climate-related actions. Through their foreign subsidiaries, these banks[…]

Author(s):Julien Bengui and Louphou Coulibaly Date:November 2022 Abstract: Are unregulated capital flows excessive during a stagflation episode? We argue that they likely are, owing to a macroeconomic externality operating through the economy’s supply side. Inflows raise domestic wages through a wealth effect on labor supply and cause unwelcome upward pressure on marginal costs in countries[…]

Author(s):Mikhail Mamonov, Anna Pestova, and Steven Ongena Date:December 2022 Abstract: We study the impact of global financial sanctions on banks and their corporate borrowers in Russia. Financial sanctions were consecutively imposed between 2014 and 2019, allowing targeted (but not yet sanctioned) banks to adapt their international and domestic exposures in advance. Using a staggered difference-in-differences[…]

Author(s):Carlos Cantú, Catherine Casanova, Rodrigo Alfaro, Fernando Chertman, Gerald Cisneros, Toni dos Santos, Roberto Lobato, Calixto López, Facundo Luna, David Moreno, Miguel Sarmiento and Rafael Nivin Date:November 2022 Abstract: We explore the mechanism that links capital inflows from abroad with domestic bank lending. Five Latin American countries use their credit registry data to examine the[…]

Author(s):Rashad Ahmed and Alessandro Rebucci Date:October 2022 Abstract: This paper shows that the price impact of foreign official (FO) purchases or sales of U.S. Treasuries (USTs) is about twice as large as previously reported in the literature once critical sources of endogeneity are addressed. We also show that prevailing estimates of this price impact suffer[…]