Banks Government Bonds And Default What Do The Data Say

Author: Nicola Gennaioli
Publisher: International Monetary Fund
ISBN: 1498320899
Size: 29.59 MB
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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.

The Euro How A Common Currency Threatens The Future Of Europe

Author: Joseph E. Stiglitz
Publisher: W. W. Norton & Company
ISBN: 0393254038
Size: 72.66 MB
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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.

Is Banks Home Bias Good Or Bad For Public Debt Sustainability

Author: Mr. Tamon Asonuma
Publisher: International Monetary Fund
ISBN: 1498393535
Size: 52.42 MB
Format: PDF
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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.

Sovereign Risk And Deposit Dynamics

Author: Mr.David A. Grigorian
Publisher: International Monetary Fund
ISBN: 1475534191
Size: 14.23 MB
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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.

Nber Macroeconomics Annual 2015

Author: Martin Eichenbaum
Publisher: University of Chicago Press
ISBN: 022639574X
Size: 48.41 MB
Format: PDF
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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.

The Future Of Large Internationally Active Banks

Author: Asli Demirg?-Kunt
Publisher: World Scientific
ISBN: 9813141409
Size: 40.70 MB
Format: PDF
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' 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. '

Systemic Risk Crises And Macroprudential Regulation

Author: Xavier Freixas
Publisher: MIT Press
ISBN: 0262028697
Size: 15.74 MB
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A framework for macroprudential regulation that defines systemic risk and macroprudential policy, describes macroprudential tools, and surveys the effectiveness of existing macroprudential regulation.

Europa Spart Sich Kaputt

Author: Joseph Stiglitz
Publisher: Siedler Verlag
ISBN: 364120092X
Size: 47.93 MB
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Raus aus der Dauerkrise. Wie Europa sich (und den Euro) retten kann Joseph Stiglitz ist einer der schärfsten Kritiker jener Sparpolitik, die aus Sicht der deutschen Bundesregierung der einzige Weg aus der Eurokrise ist. Doch kein noch so hartes Spardiktat, so Stiglitz, kann die Geburtsfehler der Gemeinschaftswährung ausgleichen. Damit die gemeinsame Währung Europas Einheit nicht vollends zerstört, müssen die Mitgliedsstaaten der Eurozone vielmehr neue Wege beschreiten. Der Wirtschaftsnobelpreisträger Stiglitz zeigt, wie diese Wege aus der Krise aussehen könnten. Schonungslos legt Joseph Stiglitz in seinem neuen Buch dar, warum die Austeritätspolitik Europas Einheit ebenso gefährdet wie das europäische Wirtschaftswachstum und warum die Europäische Zentralbank falsch liegt, wenn sie zur Krisenbewältigung vor allem auf Inflationsbekämpfung setzt. Statt diese fehlgeleitete Politik weiterhin als »alternativlos« darzustellen, zeigt Stiglitz, wie drei mögliche Wege aus der Krise aussehen könnten: erstens eine grundlegende Reform der Eurozone und der Auflagen, die den Krisenländern gemacht werden; zweitens eine geregelte Auflösung der Europäischen Union; oder drittens die Etablierung eines neuen europäischen Finanzsystems – des »flexiblen Euro«. Mit seinem Buch bringt der Nobelpreisträger neue Argumente in eine Debatte, die viel zu lange um die ewig gleichen Fragen gekreist hat. Und er eröffnet einen Ausblick, wie die Eurokrise wirklich gelöst werden kann.

El Euro

Author: Joseph E. Stiglitz
Publisher: TAURUS
ISBN: 8430618279
Size: 58.85 MB
Format: PDF, ePub, Mobi
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Joseph Stiglitz, premio Nobel de Economía, aboga por la necesidad de abandonar el euro como requisito para salvar el proyecto europeo. En 1992 la Unión Europea se propuso el proyecto de implantar una moneda única, el euro, que diez años después era ya una realidad y es hoy compartida por los 19 estados que constituyen la Eurozona. Mientras que durante los primeros años fue celebrado y considerado un éxito rotundo, a raíz de la crisis de 2008 cobraron fuerza las voces en contra. Además de ofrecer de un modo claro las claves de ese cuestionamiento, este libro plantea las siguientes preguntas: ¿hay algún modo de llevar el euro a su término sin provocar el caos en la zona, y posiblemente en el mundo? Europa ha experimentado casi una década de estancamiento, que en el caso de algunos países ha llegado a ser depresión... ¿Cómo es posible que en Estados Unidos, país donde se originó la crisis debido a la mala gestión del sector financiero, la recuperación esté siendo mucho más veloz? Stiglitz sostiene que el problema de fondo es, sencillamente, el euro. El proyecto que se diseñó para unir Europa y contribuir a su prosperidad está haciendo precisamente todo lo contrario, y como Stiglitz explica con la claridad que le caracteriza, mientras que los beneficios de continuar con el euro (ambiguos y básicamente de orden psicológico y político) son limitados, los costes, incluidos el continuo estancamiento económico y la depresión, son inmensos. Reseñas: «Stiglitz es una rara combinación de economista virtuoso, polemista ingenioso e intelectual público.» Robert Kuttner, New Statesman «Un visionario de proporciones casi keynesianas.» Michael Hirsh, Newsweek «Stiglitz es una especie rara, un economista hereje que se ha atrevido a cuestionar el autocomplaciente establishment que en otros tiempos le daba de comer.» Ian Fraser, Sunday Tribune

Government Guarantees

Author: Timothy Irwin
Publisher: World Bank Publications
ISBN: 0821368591
Size: 42.26 MB
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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.