Open-end mutual funds expose themselves to liquidity risk by granting their investors the right to daily redemptions at the fund's net asset value. We assess how swing pricing can dampen such risks by allowing the fund to settle investor orders at a price below the fund's net asset value. This...

As the Basel III package nears completion, the emphasis is shifting to monitoring its implementation and assessing the impact of the reforms. This paper presents a simple conceptual framework to assess the macroeconomic impact of the core Basel III reforms, including the leverage ratio surcharge...

Building on previous research, we study banks’ balance sheet year-end patterns in the European Union (EU) to assess the impact on supervisory measures of their systemic importance. We find that some global systemically important banks (G-SIBs) in the EU compress their balance sheet at year-end...

The phenomenal growth of cryptocurrencies raises important questions about their footprint on the financial system. What role are traditional financial intermediaries playing in cryptocurrency markets and what drives their engagement? Are new nodes emerging? We help answer these questions by...

What determines banks’ responses to higher capital requirements? We show that profitability is crucial as it underpins the opportunity cost of downsizing and the ability to generate capital. To illustrate this, we assess the introduction of capital surcharges for systemically important banks....

We study banks’ year-end window dressing in the European Union to assess how it affects the identification of global systemically important banks (G-SIBs) and the associated capital surcharges. We find that G-SIBs compress their balance sheet at year-end to an extent that they can reduce their...

Welfare gains from increasing product variety are an important source of the gains from international trade. Recent empirical studies have largely focused on measuring the gains from an increased variety of imports. Trade theory, however, suggests that international trade heavily affects the...