Banks Government Bonds And Default What Do The Data Say

Author: Nicola Gennaioli
Publisher: International Monetary Fund
ISBN: 1498320899
Size: 73.94 MB
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Banks Government Bonds And Default What Do The Data Say from the Author: Nicola Gennaioli. We analyze holdings of public bonds by over 20,000 banks in 191 countries, and the role of these bonds in 20 sovereign defaults over 1998-2012. Banks hold many public bonds (on average 9% of their assets), particularly in less financially-developed countries. During sovereign defaults, banks increase their exposure to public bonds, especially large banks and when expected bond returns are high. At the bank level, bondholdings correlate negatively with subsequent lending during sovereign defaults. This correlation is mostly due to bonds acquired in pre-default years. These findings shed light on alternative theories of the sovereign default-banking crisis nexus.

Systemic Risk Crises And Macroprudential Regulation

Author: Xavier Freixas
Publisher: MIT Press
ISBN: 0262028697
Size: 30.95 MB
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Systemic Risk Crises And Macroprudential Regulation from the Author: Xavier Freixas. A framework for macroprudential regulation that defines systemic risk and macroprudential policy, describes macroprudential tools, and surveys the effectiveness of existing macroprudential regulation.

Is Banks Home Bias Good Or Bad For Public Debt Sustainability

Author: Mr. Tamon Asonuma
Publisher: International Monetary Fund
ISBN: 1498393535
Size: 18.88 MB
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Is Banks Home Bias Good Or Bad For Public Debt Sustainability from the Author: Mr. Tamon Asonuma. Motivated by the recent increase in domestic banks’ holdings of domestic sovereign debt (i.e., home bias) in the European periphery, this paper analyzes implications of banks’ home bias for the sovereign’s debt sustainability. The main findings, based on a sample of advanced (AM) and emerging market (EM) economies, suggest that home bias generally reduces the cost of borrowing for AMs and EMs when debt levels are moderate to high. A worsening of market sentiments appears to dimish the favorable impact of home bias on cost of borrowing particularly for EMs. In addition, for AMs and EMs, higher home bias is associated with higher debt levels, and less responsive fiscal policy. The findings suggest that home bias indeed matters for debt sustainability: Home bias may provide fiscal breathing space, but delays in fiscal consolidation may actually delay problems until debt reaches dangerously high levels.

The Euro How A Common Currency Threatens The Future Of Europe

Author: Joseph E. Stiglitz
Publisher: W. W. Norton & Company
ISBN: 0393254038
Size: 66.68 MB
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The Euro How A Common Currency Threatens The Future Of Europe from the Author: Joseph E. Stiglitz. Can Europe prosper without the euro? In 2010, the 2008 global financial crisis morphed into the “eurocrisis.” It has not abated. The 19 countries of Europe that share the euro currency—the eurozone—have been rocked by economic stagnation and debt crises. Some countries have been in depression for years while the governing powers of the eurozone have careened from emergency to emergency, most notably in Greece. In The Euro, Nobel Prize–winning economist and best-selling author Joseph E. Stiglitz dismantles the prevailing consensus around what ails Europe, demolishing the champions of austerity while offering a series of plans that can rescue the continent—and the world—from further devastation. Hailed by its architects as a lever that would bring Europe together and promote prosperity, the euro has done the opposite. As Stiglitz persuasively argues, the crises revealed the shortcomings of the euro. Europe’s stagnation and bleak outlook are a direct result of the fundamental challenges in having a diverse group of countries share a common currency—the euro was flawed at birth, with economic integration outpacing political integration. Stiglitz shows how the current structure promotes divergence rather than convergence. The question then is: Can the euro be saved? After laying bare the European Central Bank’s misguided inflation-only mandate and explaining how eurozone policies, especially toward the crisis countries, have further exposed the zone’s flawed design, Stiglitz outlines three possible ways forward: fundamental reforms in the structure of the eurozone and the policies imposed on the member countries; a well-managed end to the single-currency euro experiment; or a bold, new system dubbed the “flexible euro.” With its lessons for globalization in a world economy ever more deeply connected, The Euro is urgent and essential reading.

Nber Macroeconomics Annual 2015

Author: Martin Eichenbaum
Publisher: University of Chicago Press
ISBN: 022639574X
Size: 20.94 MB
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Nber Macroeconomics Annual 2015 from the Author: Martin Eichenbaum. This year, the NBER Macroeconomics Annual celebrates its thirtieth volume. The first two papers examine China’s macroeconomic development. “Trends and Cycles in China's Macroeconomy” by Chun Chang, Kaiji Chen, Daniel F. Waggoner, and Tao Zha outlines the key characteristics of growth and business cycles in China. “Demystifying the Chinese Housing Boom” by Hanming Fang, Quanlin Gu, Wei Xiong, and Li-An Zhou constructs a new house price index, showing that Chinese house prices have grown by ten percent per year over the past decade. The third paper, “External and Public Debt Crises” by Cristina Arellano, Andrew Atkeson, and Mark Wright, asks why there appear to be large differences across countries and subnational jurisdictions in the effect of rising public debts on economic outcomes. The fourth, “Networks and the Macroeconomy: An Empirical Exploration” by Daron Acemoglu, Ufuk Akcigit, and William Kerr, explains how the network structure of the US economy propagates the effect of gross output productivity shocks across upstream and downstream sectors. The fifth and sixth papers investigate the usefulness of surveys of household’s beliefs for understanding economic phenomena. “Expectations and Investment,” by Nicola Gennaioli, Yueran Ma, and Andrei Shleifer, demonstrates that a chief financial officer's expectations of a firm's future earnings growth is related to both the planned and actual future investment of that firm. “Declining Desire to Work and Downward Trends in Unemployment and Participation” by Regis Barnichon and Andrew Figura shows that an increasing number of prime-age Americans who are not in the labor force report no desire to work and that this decline accelerated during the second half of the 1990s.

Sovereign Risk And Deposit Dynamics

Author: Mr.David A. Grigorian
Publisher: International Monetary Fund
ISBN: 1475534191
Size: 66.19 MB
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Sovereign Risk And Deposit Dynamics from the Author: Mr.David A. Grigorian. The unprecedented expansion of sovereign balance sheets since the global financial crisis has given a new meaning to the term sovereign risk. Developments in Europe since early 2010 presented new challenges for the functioning of private banks in an environment of heightened sovereign risk. This paper uses an innovative way of measuring the perception of sovereign risk and its impact on deposit dynamics during 2006–11. Using an extension of a common market discipline framework, it shows that exposure to sovereign risk may have limited the ability of banks in Europe to attract deposits. The results are robust to inclusion of conventional measures of bank performance and the sector-wide holdings of foreign sovereign debt.

The Future Of Large Internationally Active Banks

Author: Asli Demirg?-Kunt
Publisher: World Scientific
ISBN: 9813141409
Size: 33.95 MB
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The Future Of Large Internationally Active Banks from the Author: Asli Demirg?-Kunt. ' The Great Financial Crisis of 2007–2010 has had a major impact on large cross-border banks, which are widely blamed for the start and severity of the crisis. As a result, much public policy, both in the United States and elsewhere, has been directed at making these banks safer and less influential by reducing their size and permissible powers through increased government regulation. At the Federal Reserve Bank of Chicago''s 18th annual International Banking Conference, held in November 2015, the status of these large cross-border banks was critically evaluated. In collaboration with the World Bank, the conference held discussions on the current regulatory landscape for large and internationally active financial institutions; the impact of regulation on bank permissible activities and international trade; improvements in risk management; necessary repairs to the bank safety net; the resolution of insolvent banks operating across national borders; corporate governance for banks in the new environment; implications for market and government discipline; and, progress in achieving international cooperation. Contributors include international policymakers, practitioners, researchers, and academics from more than 30 countries. The papers from the conference are collected in this volume. Contents:Special Addresses:Shared Responsibility for the Regulation of International Banks (Daniel K Tarullo)Post-Crisis Risks and Bank Equity Capital (Thomas M Hoenig)Reputational Risks and Large International Banks (Ingo Walter)The Cross-Border Banking Landscape:Cross-Border Banking Flows and Organizational Complexity in Financial Conglomerates (Linda S Goldberg)Global Banks: Good or Good-Bye? (Thomas F Huertas)The Future of Large, Internationally Active Banks: Does Scale Define the Winners? (Joseph P Hughes and Loretta J Mester)The International Banking Landscape: Developments, Drivers, and Potential Implications (Juan A Marchetti)Banking Activity Trends Following the Financial Crisis: Expansion? Retrenchment?:How Did Foreign Bank Lending Change During the Recent Financial Crisis: An Overview (Allen N Berger, Tanakorn Makaew, and Rima Turk-Ariss)Banking Activity Trends Following the Financial Crisis: Expansion or Retrenchment? (Stijn Claessens and Neeltje van Horen)Global Banking: Old and New Lessons from Emerging Europe (Ralph De Haas)Banks'' Love Story with Sovereign Debt: Causes, Consequences, and Policy (Alexander Popov)Implications for Supervision and Regulation:Patterns in International Banking and Their Implications for Prudential Policies (Ingo Fender and Patrick McGuire)Supervision and Regulation: Effects of Global Financial Crisis on Japan and Asia (Takatoshi Ito)The Future of Large, Internationally Active Banks: Implications for Supervision and Regulation (Anil K Kashyap)Risk Management:At a Crossroad? Regulatory Capital and Operational Risk (Dietmar Serbee and Michael Alix)The Transmission of Bank Default Risk During the Global Financial Crisis (Deniz Anginer, Eugenio Cerutti, and Maria Soledad Martinez Peria)An Overview of Regulatory Stress-Testing and How to Improve It (Matt Pritsker)The Role of Foreign Banks in Local Credit Booms (Stijn Claessens and Neeltje van Horen)Safety Net and Resolution Issues for Large and Cross-Border Banks:Towards a Global Solution for a Global Problem (Eva H G Hüpkes)Cross-Border Bank Resolution: Recent Developments (Ceyla Pazarbasioglu, Ross Leckow, Barend Jansen, Marina Moretti, Wouter Bossu, Alvaro Piris, Elsie Addo Awadzi, Marc Dobler, Alessandro Gullo, Oana Nedelescu, Sven Stevenson, and Oliver Wünsch)Corporate Governance Issues in the New Environment:Corporate Governance and Bank Risk Taking (Deniz Anginer, Asli Demirgüç-Kunt, Harry Huizinga, and Kebin Ma)Vertical and Horizontal Problems in Financial Regulation and Corporate Governance (Jonathan R Macey and Maureen O''Hara)Incentive Compensation and Bank Risk: Insights from Organizational Economics (Edward Simpson Prescott)Cultural Failures at Banks: A Review and Possible Solutions (Alan Morrison and Joel Shapiro)Policy Discussion: Where to from Here?:Understanding the Future of Banking Scale and Scope Economies, and Fintech (Arnoud W A Boot)Four Key Factors Affecting the Future of Large, Internationally Active Banks (John C Dugan)The Last Crisis, the Next Crisis, and the Future of Large Banks (Phillip Swagel)The Future of Large, Internationally Active Banks (Mahmoud Mohieldin) Readership: Advanced economics, finance and policy undergraduates and postgraduates; finance professionals; policy makers and researchers who are interested in money and banking, international banks and financial institutions. '

Sovereign Debt And The Financial Crisis

Author: Carlos A. Primo Braga
Publisher: World Bank Publications
ISBN: 9780821385432
Size: 14.97 MB
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Sovereign Debt And The Financial Crisis from the Author: Carlos A. Primo Braga. The book presents and discusses policy-relevant research on the current debt challenges which developing, emerging market and developed countries face. Its value added lies in the integrated approach of drawing on theoretical research and evidence from practitioners' experience in developing and emerging market countries.

Government Guarantees

Author: Timothy Irwin
Publisher: World Bank Publications
ISBN: 0821368591
Size: 53.65 MB
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Government Guarantees from the Author: Timothy Irwin. The book considers when governments should give guarantees to private investors. After describing the history of guarantees, and the challenges the politics and psychology create for good decisions, the book sets out a principles for allocating risk (and therefore guarantees), techniques for valuing guarantees, and rules to encourage good decisions.

Housing Finance Policy In Emerging Markets

Author: Loic Chiquier
Publisher: World Bank Publications
ISBN: 0821377515
Size: 47.24 MB
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Housing Finance Policy In Emerging Markets from the Author: Loic Chiquier. Housing finance markets have been changing dramatically in both emerging and developed economies. On the one hand, housing finance markets are expanding and represent a powerful engine for economic growth in many emerging economies. However, the unfolding sub-prime mortgage crisis highlights the risks and potential turbulence that this sector can introduce into the financial system when expanding without proper infrastructure and regulation. As housing finance keeps growing in emerging economies to match a rising demand for housing, new risk management approaches, business models, funding tools, and policy instruments can help. Yet many questions remain about the right balance between innovation and regulation, the extent of risks to the financial system, the appropriate role of the state to promote affordable housing, and the effects of the sub-prime crisis. This book provides a guide for policymakers dealing with housing finance in emerging markets. It highlights the prerequisites for an effective housing finance system; it lays out several policy alternatives and models of housing finance; and it explores the role of governments in expanding access to housing finance for lower-income households. There is no "best" model set out in this book. The aim is to provide a developmental roadmap that can be tailored and sequenced to each country's situation and timing.