The focus of the paper is on five key financial stability issues in Emerging market and developing economies (EMDEs), which have been selected on the basis of their degree of materiality for a reasonably broad range of EMDEs; their implications for regulatory, supervisory or other financial...

Although progress has been made in strengthening the Swiss economy, systemic risks posed by large banks as well as revisions to the macroprudential framework are still in train. The authorities welcomed the too-big-to-fail (TBTF) legislation and intervention of the Swiss National Bank (SNB) on...

The Chinese authorities welcomed the spillover analysis, noting that their policies have important global spillover effects. The note also discusses China’s evolving role in global trade, impact of rebalancing on the supply chain, estimating China’s spillovers, elasticities...

One plausible mechanism through which financial market shocks may propagate across countries is through the effect of past gains and losses on investors' risk aversion. We first present a simple model on how heterogeneous changes in investors' risk aversion affect portfolio decisions and stock...

This paper provides the most comprehensive empirical study of the effectiveness of macroprudential instruments to date. Using data from 49 countries, the paper evaluates the effectiveness of macroprudential instruments in reducing systemic risk over time and across institutions and markets. The...

This paper develops a two-country DSGE model to investigate the transmission of a global financial crisis to a small open economy. We find that economies hit by a sudden stop arising from financial distress in the global economy are likely to face a more prolonged crisis than sudden stop...