Author(s):Javier Bianchi and César Sosa-Padilla Date:March 2023 Abstract: This paper surveys the recent empirical literature on historical banking crises, defined as events taking place before 1980. Advances in data collection and identification have provided new insights into the causes and consequences of crises both immediately and over the long run. We highlight three overarching threads[…]
Author(s):Javier Bianchi and César Sosa-Padilla Date:March 2023 Abstract: This paper investigates the implications of international financial sanctions for the reserve currency status of the US dollar. We propose a simple model of a reserve currency, demonstrate how the anticipation of financial sanctions can weaken the dollar’s status, and evaluate the welfare implications.
Author(s):Katharina Bergant, Gian Maria Milesi-Ferretti, and Martin Schmitz Date:February 2023 Abstract: We provide stylized facts on nonresident holdings of emerging market bonds and analyze the determinants of euro area investors’ purchases of such securities, using a comprehensive security-level dataset that tracks net transactions of individual bonds issued by emerging market economies. Euro area investors show[…]
Author(s):Maurice Obstfeld and Haonan Zhou Date:February 2023 Abstract: The U.S. dollar’s nominal effective exchange rate closely tracks global financial conditions, whichthemselves show a cyclical pattern. Over that cycle, world asset prices, leverage, and capital flowsmove in concert with global growth, especially influencing the fortunes of emerging and developingeconomies (EMDEs). This paper documents that dollar appreciation[…]
Author(s):Mert Onen, Hyun Song Shin and Goetz von Peter Date:February 2023 Abstract: This paper introduces a new dataset on emerging market sovereign bonds, distinguishing between the currency of denomination and the residence of investors. Our dataset is on long-term government bonds and provides a more complete coverage of bonds issued in domestic markets. We document[…]
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):Maximilian Grimm, Òscar Jordà, Moritz Schularick, and Alan M. Taylor Date:February 2023 Abstract: Do periods of persistently loose monetary policy increase financial fragility and the likelihood of a financial crisis? This is a central question for policymakers, yet the literature does not provide systematic empirical evidence about this link at the aggregate level. In this[…]
Author(s):Paul Bergin, Woo Jin Choi, and Ju H. Pyun Date:February 2023 Abstract: While substantial empirical research has evaluated the question of whether capital account openness promotes economic growth, this paper finds empirical evidence for cases where the opposite is true—that a policy of capital controls can promote economic growth, when combined with a policy of[…]
Author(s):Toni Ahnert, Peter Hoffmann, Agnese Leonello, and Davide Porcellacchia Date:February 2023 Abstract: What is the effect of Central Bank Digital Currency (CBDC) on financial stability? We answer this question by studying a model of financial intermediation with an endogenously determined probability of a bank run, using global games. As an alternative to bank deposits, consumers[…]
Author(s):Iñaki Aldasoro, Sebastian Doerr, and Haonan Zhou Date:February 2023 Abstract: This paper shows that non-banks curtail their syndicated credit by significantly more than banks during crises, even after accounting for time-varying lender and borrower characteristics. We provide novel evidence that differences in the value of lending relationships explain most of the gap: unlike for banks,[…]