Author(s):Alan M. Taylor, James S. Cloyne, and Patrick Hürtgen Date:October 2022 Abstract: Identifying exogenous variation in monetary policy is crucial for investigating central bank policy transmission. Using newly-collected archival real-time data utilized by the Central Bank Council of the German Bundesbank, we identify unexpected changes in German monetary policy from 580 policy meetings between 1974[…]

Author(s):J. Scott Davis and Andrei Zlate Date:April 2022 Abstract: We estimate the heterogeneous effect of the global financial cycle on exchange rates and cross-border capital flows during the COVID-19 pandemic, using weekly exchange rate and portfolio flow data for a panel of 48 advanced and emerging market economies. We begin by estimating the global financial[…]

Author(s):Indraneel Chakraborty, Saketh Chityala, Apoorva Javadekar, and Rodney Ramcharan Date:July 2022 Abstract: This paper studies how interconnected plants distribute additional liquidity from banks through the supply chain. Using a spatially segmented bank branch expansion rule in India, we find that direct exposure to additional bank credit allows plants to hold less precautionary cash and increase[…]

Author(s):Marina Conesa, Giulia Lotti, and Andrew Powell Date:July 2020 Abstract: Theory suggests both resilience and fragility in banking networks. This paper finds both, exploiting a new database of cross-border syndicated lending to developing countries from 1993 to 2017. Shocks propagate via co-lenders driven by central players, but shocks impacting fringe banks have little impact. The[…]

Author(s):Shohini Kundu, Seongjin Park, and Nishant Vats Date:June 2022 Abstract: What are the aggregate effects of deposit shocks? We introduce a new fact regarding the within-bank geographic concentration of deposits — 30% of deposits are concentrated in a single county. We construct deposit shocks by combining the within-bank deposit concentration with local natural disasters. We[…]

Author(s):Simon Baumgartner, Alex Stomper, Tom Schober, and Rudolf Winter-Ebmer Date:November 2022 Abstract: How does small-firm employment respond to exogenous labor productivity risk? We find that this depends on the capitalization of firms’ local banks. The evidence comes from firms employing workers whose productivity depends on the weather. Weather-induced labor productivity risk reduces this employment, and[…]

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[…]