The Czech financial sector has changed dramatically since transition. In fifteen years, it has developed from a state-owned mono-bank into a privatised bank-based financial system with developing capital and private equity markets. This country focus analyses the development of the financial...

A central puzzle in international finance is that real exchange rates are volatile and, in stark contradiction to effcient risk-sharing, negatively correlated with cross-country consumption ratios. This paper shows that incomplete asset markets and a low price elasticity of tradables can account...

In this note we demonstrate that in affine models for bilateral exchange rates, the nature of return interdependence during crises depends on the tail properties of the fundamentals' distributions. We denote crisis linkages as either strong or weak, in the sense that the dependence remains or...

In 2006 the external net borrowing requirement of the Spanish economy was almost 8% of GDP, after having been in balance between 1993 and 1998. This increased borrowing requirement is the financial mirror image of a growth model, in which corporate and households' investments are generating an...

This article addresses the relationship between the real economy and the financial sector, asking the question: to what extent does the crisis in the financial sector cast a shadow on economic activity? Various potential linkages are investigated, for example the impact of credit restrictions on...