How does access to credit impact consumption volatility? Theory and evidence from advanced economies suggests that … greater household access to finance smooths consumption. Evidence from emerging markets, where consumption is usually more … volatile than income, indicates that financial reform further increases the volatility of consumption relative to output. We …

Episodes of rapid credit growth, especially credit booms, tend to end abruptly, typically in the form of financial … crises. This paper presents the findings of a comprehensive event study focusing on 99 credit booms. Loose monetary policy … stances seem to have contributed to the build-up of credit booms across both advanced and emerging economies. In particular …

. The tendency to underprice systemic liquidity risk and currency-induced credit risk creates vulnerabilities that need … liquidity and solvency risks. The paper also shows that most dollarized countries have addressed their liquidity vulnerabilities …, but few have addressed those arising from currency-induced credit risks. …

volatility. Second, aggregate uncertainty in conjunction with limited bank capitalization is shown to produce excessive credit … constraints that, under certain conditions, justify the public supply of liquidity. The paper suggests applications with respect …

can withstand a broad range of shocks. The current turbulence in global credit markets has affected Canada’s asset …