The government guarantees on bank bonds adopted in 2008 in many advanced economies to support the banking systems were broadly effective in resuming bank funding and preventing a credit crunch. The guarantees, however, also caused distortions in the cost of bank borrowing. Their reintroduction...

We propose a new approach to measuring sovereign default risk. We use sovereign credit ratings and historical default rates provided by credit rating agencies to construct a measure of ratings-implied expected loss. We compare our measure of expected loss from sovereign defaults with stand-alone...

Using information on 98 internationally active banks headquartered in 27 countries over the period 1994--2012, we analyse the nonlinear link between income diversification (defined as noninterest income to total income) and bank return on assets (ROA). The main result is that income...

In the "new normal" for monetary policy, central bank balance sheets are likely to be larger and used more actively than before the Global Financial Crisis. Those who manage assets for central banks should take account of the asset and liability choices of many other policy-makers - those...

Reserves and institutional asset managers have to constantly monitor and assess risk-return trade-offs in the markets where they invest. Among the various tools and indicators that they employ, understanding the balance sheet strength of commercial banks is indispensable. This is because of the...

In 2010 authorities have taken the first steps to end some of the public support measures put in place in response to the financial crisis, starting with government guarantees for bond issues. Financial institutions have made extensive use of this tool, which has been effective in avoiding a...