Showing papers in "Journal of Financial Stability in 2013"

TL;DR: In this article, the authors analyzed the global banking network using data on cross-border banking flows for 184 countries during 1978-2010 and found that the density of global banking networks defined by these flows is pro-cyclical, expanding and contracting with the global cycle of capital flows.

TL;DR: In this article, the authors point out the circumstances under which a more active policy agenda on this front would be justified and offer insights on the pros and cons of various policy tools that can be used to contain the damage to the financial system and the economy from real estate boom-bust episodes.

TL;DR: In this article, the role of government-owned banks in the event of financial crises is studied. But the authors focus on bank lending and do not consider the impact of government intervention on the overall banking system.

TL;DR: In this article, the authors propose a form of contingent capital for financial institutions that converts from debt to equity if two conditions are met: the financial institution stock price is at or below a trigger value and the value of a financial institution index is also at a or below the trigger value.

TL;DR: In this paper, the authors examined whether and how selected central banks responded to episodes of financial stress over the last three decades and employed a recently developed monetary-policy rule estimation methodology which allows for time-varying response coefficients and corrects for endogeneity.

TL;DR: In this article, the authors examined the relevance and effectiveness of stock return correlations among financial institutions as an indicator of systemic risk and found that the correlation spikes tend to predict or coincide with significant economic or market events, especially during the 2007-2008 financial crisis.

TL;DR: In this paper, the authors constructed a financial stress index for Bulgaria, Czech Republic, Hungary, Poland, and Russia and examined the relationship between financial stress and economic activity, finding that there is a significant relationship between stress and some measures of economic activity.

TL;DR: The authors discusses the changes that occurred in the conduct and instruments of monetary policy used by major central banks when the crisis hit; discusses the new tradeoffs and controversies engendered by those policy reactions; and speculates about additional likely future changes in monetary policy and institutions.

TL;DR: In this paper, the interactions between government's indebtedness, sovereign default risk and the size of the informal sector were analyzed, and the empirical results from cross-country panel regressions showed that the presence of informality constrains the set of pledgeable fiscal policy alternatives, increases public debt and the implied probability of sovereign debt restructuring.

TL;DR: In this paper, the authors provide evidence on regulatory and supervisory practices around the world in the context of the global financial crisis, using data from a new World Bank survey covering 143 countries, and find that crisis countries had less stringent and more complex definitions of capital but exhibited lower actual capital ratios, faced fewer restrictions on non-bank activities, were less strict in the regulatory treatment of bad loans, and were less able to demand banks to adjust their equity, provisions or compensation schemes, and had greater disclosure requirements but weaker incentives for private agents to monitor banks.

TL;DR: The authors analyzed UK monetary policy using monthly data for 1992-2010 and found that policy is best described as a weighted average of a "financial crisis" regime in which policy rates respond strongly to financial stress and a "no crisis" Taylor rule regime.

TL;DR: In this paper, the authors examined the impact of political factors on the behavior and performance of commercial banks in 11 Central European countries from 1995 to 2008 and found that state-owned banks report significantly smaller net interest income ratios during the years of parliamentary elections.

TL;DR: In this article, the authors analyzed a sample of large international banks in major advanced economies and examined the impact that bank-specific factors have on an institution's solvency risk and its contribution to systemic risk.

TL;DR: This paper used a vector-autoregression (VAR) model and data from the University of Michigan Survey of Consumers to study the importance of news and consumers' beliefs for housing-market dynamics and aggregate fluctuations.

TL;DR: In this article, the authors empirically analyzed the effects of financial regulations and innovations on the global financial crisis and showed that regulatory measures such as restrictions on bank activities and entry requirements have decreased the likelihood of a banking crisis, while capital regulation and government ownership of banks have increased the likelihood for a currency crisis.

TL;DR: In this paper, a logit approach was used to predict banking crisis in 14 OECD countries using a proxy for the ratio of banks' off-balance-sheet activity to total (off and on balance sheet) activity.

TL;DR: In this paper, the effectiveness of the Emergency Credit Guarantee (ECG) Program in increasing credit availability and improving the ex-post performance of small businesses was examined using a unique firm-bank matched dataset.

TL;DR: In this paper, the authors proposed a method for calculating systemic liquidity shortages by incorporating not only direct liquidity shortages but also indirect liquidity shortages due to the knock-on effects through interbank linkages, and found that a deficit bank can mitigate a liquidity shortage by holding more claims on a surplus bank.

TL;DR: In this paper, the authors carried out interbank contagion simulations for the German banking sector for the period from the first quarter of 2008 to the second quarter of 2011, and obtained the following results: (i) the system becomes less vulnerable to direct interbank derivatives over time; (ii) the loss distribution for each point in time can be condensed into one indicator, the expected number of failures, without much loss of information.

TL;DR: In this paper, the use of financial derivatives affects banks' informational structure and future stock performance based on a sample of large bank holding companies in the US, and they find that high level use of interest rate and foreign exchange derivatives are associated with an increase in the synchronicity (R 2 ) of stock price movements with the market index, which indicates less revelation of bank-specific information to the market.

TL;DR: In this paper, the authors analyzed the relationship between the credit provided by state-owned banks and local economic growth in Turkey during crisis periods and in election years and found that the share of state banks in the credit market in crisis periods was significantly higher than their share in non-crisis and non-election periods.

TL;DR: In this paper, a systematic analysis of the role of three main efforts: consolidation in supervision, decreasing central bank involvement, and improving supervisory governance is presented, concluding that two supervisory features were negatively correlated with resilience.

TL;DR: This article studied the institutional structures of prudential and business conduct supervision of financial services in 98 high and middle income countries over the past decade and identified possible drivers of changes in these supervisory structures using the panel ordered probit analysis.

TL;DR: In this article, the authors consider the provision of deposit insurance as the outcome of a non-cooperative policy game between nations and identify both defensive and beggar-thy-neighbour policies.

TL;DR: In this paper, the role played by Mutual Guarantee Institutions (MGIs) in the lending policies undertaken by banks at the peak of the Great Crisis of 2007-2009 is examined.

TL;DR: In this article, a method to monitor systemic risk in the European banking system Aggregated Distance-to-Default series are generated using option prices information from systemically important banks and the STOXX Europe 600 Banks Index.

TL;DR: In this paper, the authors model the failed bank resolution process as a repeated game between a utility-maximizing government resolution authority and a profit maximising banking industry, and find equilibrium conditions remarkably descriptive of government responses to actual and potential large bank insolvencies during the recent financial crisis.

TL;DR: In this paper, the use of information technology (IT) contributes to bank output, and how IT-augmented bank productivity relates to differences in market power, and the results hold across a range of bank output definitions and productivity estimation methods.

TL;DR: In this paper, the authors study whether central bank independence and monetary policy arrangements can jointly influence the likelihood of policymakers assigning banking supervision to central banks, and they find that a higher degree of central bank operational independence is associated with a lower probability of supervisory powers being entrusted to the monetary authority.

TL;DR: In this article, the authors investigate the information efficiency of the U.S. credit default swap market using evidence from earnings surprises and find that negative earnings surprises are well anticipated in the CDS market in the month prior to the announcement, with both economically and statistically stronger reactions for speculative grade firms than for investment grade firms.