The study of financial stability has become the cornerstone of modern macroeconomic policy particularly for developed countries. The recent global financial crisis has underscored the importance of understanding financial instability especially in the context of managing credit risk with...

Using panel data on selected Financial Soundness Indicators (FSIs) this paper investigates the potential strengths and vulnerabilities of financial intermediaries across more than 50 countries. Our econometric analysis reveals strong influence of business cycle, inflation, and real effective...

Despite the well documented gains from international diversification, investors continue to show a strong preference for investing in domestic assets, a phenomenon referred to in the literature as ‘home bias’. This bias comes at a price — a higher cost of capital for businesses. We...