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New financial stability governance structures and central banks
Edge, Rochelle M.; Liang, Jean Nellie - 2019
We evaluate the institutional frameworks developed to implement time-varying macroprudential policies in 58 countries. We focus on new financial stability committees (FSCs) that have grown dramatically in number since the global financial crisis, and their interaction with central banks, and...
Persistent link: https://www.econbiz.de/10012018438
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Financial vulnerabilities, macroeconomic dynamics, and monetary policy
Aikman, David; Lehnert, Andreas; Liang, Jean Nellie; … - 2016
We define a measure to be a financial vulnerability if, in a VAR framework that allows for nonlinearities, an impulse to the measure leads to an economic contraction. We evaluate alternative macrofinancial imbalances as vulnerabilities: nonfinancial sector credit, risk appetite of financial...
Persistent link: https://www.econbiz.de/10011578131
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Emergency collateral upgrades
Carlson, Mark; Macchiavelli, Marco - 2018
provided collateralized loans. The other lent securities against a pledge of other securities, effectively providing collateral … alleviated dealers' funding pressures when access to repos backed by illiquid collateral deteriorated. We also find that dealers … used the facilities, especially the ability to upgrade collateral, to continue funding their own illiquid inventories …
Persistent link: https://www.econbiz.de/10012016592
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Strategic liquidity mismatch and financial sector stability
Silva, André F. - 2019
This paper examines whether banks strategically incorporate their competitors' liquidity mismatch policies when determining their own and how these collective decisions impact financial sector stability. Using a novel identification strategy exploiting the presence of partially overlapping peer...
Persistent link: https://www.econbiz.de/10012182410
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Financial stability and optimal interest-rate policy
Ajello, Andrea; Laubach, Thomas; López-Salido, José David - 2016
We study optimal interest-rate policy in a New Keynesian model in which the economy can experience financial crises and the probability of a crisis depends on credit conditions. The optimal adjustment to interest rates in response to credit conditions is (very) small in the model calibrated to...
Persistent link: https://www.econbiz.de/10011578304
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Money-financed fiscal programs : a cautionary tale
English, William B.; Erceg, Christopher J.; … - 2017
A number of prominent economists and policymakers have argued that money-financed fiscal programs (helicopter drops) could be efficacious in boosting output and inflation in economies facing persistent economic weakness, very low inflation, and significant fiscal strains. We employ a...
Persistent link: https://www.econbiz.de/10011709425
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Shock transmission through cross-border bank lending : credit and real effects
Hale, Galina; Kapan, Tümer; Minoiu, Camelia - 2019
We study the transmission of financial shocks across borders through international bank connections. Using data on cross-border interbank loans among 6,000 banks during 1997-2012, we estimate the effect of asset-side exposures to banks in countries experiencing systemic banking crises on...
Persistent link: https://www.econbiz.de/10012181946
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"Unconventional" monetary policy as conventional monetary policy : a perspective from the U.S. in the 1920s
Carlson, Mark; Duygan-Bump, Burcu - 2018
To implement monetary policy in the 1920s, the Federal Reserve utilized administered interest rates and conducted open market operations in both government securities and private money market securities, sometimes in fairly considerable amounts. We show how the Fed was able to effectively use...
Persistent link: https://www.econbiz.de/10011927094
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International aspects of central banking : diplomacy and coordination
Kahn, Robert B.; Meade, Ellen E. - 2016
In this paper, we discuss the evolution of central bank interactions since the early 1970s following the breakdown of the managed exchange-rate system that was negotiated at Bretton Woods. We review the most important forums or organizations through which central banks have engaged in diplomacy....
Persistent link: https://www.econbiz.de/10011578189
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Inflation and deflationary biases in inflation expectations
Lamla, Michael; Pfajfar, Damjan; Rendell, Lea - 2019
We explore the consequences of losing confidence in the price-stability objective of central banks by quantifying the inflation and deflationary biases in inflation expectations. In a model with an occasionally binding zero-lower-bound constraint, we show that an inflation bias as well as a...
Persistent link: https://www.econbiz.de/10012181222