Simple time series models looking for the effect of financial crises on output generally find that they reduce the sustainable level of output permanently. However, not all crises are the same, with some being caused by recessions and others causing or preceding recessions. Using a common...

In the wake of the subprime crisis, there has been widespread discussion of the disproportionate risks posed to the financial system by large banks that may consider themselves “too big to fail”. This has led in turn to suggestions that radical policies with the effect of reducing bank size...

Simple time series models looking for the effect of financial crises on output generally find that they reduce the sustainable level of output permanently. However, not all crises are the same, with some being caused by recessions and others causing or preceding recessions. Using a common...

In this paper we seek to provide a critical assessment of monetary and related financial-sector policies in the UK during and after the recent financial crisis. We find, in particular, that macroprudential surveillance failed to predict the depth of the crisis, and although some concerns were...

Policy proposals on the new international standards for bank capital and liquidity are being debated without any methodical evaluation of their effects on both crisis probabilities and concurrent social costs.

Given the magnitude of “global imbalances” in the run-up to the subprime crisis, we test for an impact of the current account balance on the probability of banking crises in OECD countries since 1980. This variable has been neglected in most early warning models to date, despite its...

Recently there has been growing interest in examining the potential short-term link between survey-based confidence indicators and real economic activity, notably for macroeconomic policy making. This paper builds on previous studies to establish whether there is a short-term predictive...