The volume of credit extended by a bank can be an informative signal of its abilities in loan selection and management. It is shown that, under asymmetric information, banks may therefore rationally lend more than they would otherwise in order to demonstrate their quality, thus negatively...

A central bank must decide on the frequency with which it will conduct open market operations and the variability in short-term money market that it will allow. It is shown how the optimal operating procedure balances the value of attaining an immediate target and broadcasting the central...

The objective of this paper is to review the Fund's thinking about signaling since its inception, with a view to drawing lessons for the design of possible signaling mechanisms. Over the years, the Fund has both reflected on the ways in which its main activities - especially surveillance and use...

Of the new members entering the European Union (EU) in May 2004, several had achieved a decade of impressive export growth, expanding significantly their shares of world markets. The empirical analysis shows that over the period 1994–2004, quality and technology upgrading associated with the...

Pakistan undertook major financial sector reforms starting in the late 1980s. The effects of these reforms on the profitability and cost and revenue efficiency of the banking sector are evaluated. The revenue performance of all banks, and especially the privatized banks, improved significantly,...

The condition of banking systems in developing countries strongly influences the design and effectiveness of economic adjustment policies. Bank portfolio weakness can limit the flexibility of interest rate policy, the scope of financial reforms, and the conduct of monetary and fiscal policy....

The Institutional View (IV) on the Liberalization and Management of Capital Flows, adopted in 2012, provides the basis for consistent advice, and where relevant, assessments on policies related to capital flows. This paper reviews the IV, informed by advances in research, notably the work on an...

Capital flows have increased significantly in recent years and are a key aspect of the global monetary system. They offer potential benefits to countries, but their size and volatility can also pose policy challenges. The Fund needs to be in a position to provide clear and consistent advice with...