On October 25, 2010, a Mw = 7.7 magnitude earthquake was recorded in the Kepulauan Mentawai archipelago, in Indonesia. Following the earthquake, the Pacific Tsunami Warning Center issued a tsunami bulletin to the countries of the Indian Ocean informing them that a local tsunami watch was in...

This paper seeks to draw lessons from the IMF’s experience in handling financial crises around the globe over the past ten years that are relevant to the challenges faced by countries in Latin America, especially in the wake of the recent crisis in Argentina. Experience suggests that...

The global financial crisis has highlighted the importance of early identification of weak banks: when problems are identified late, solutions are much more costly. Until recently, Europe has seen only a small number of outright bank failures, which made the estimation of early warning models...

This paper proposes a stylized sequencing of banking supervision and bank restructuring measures designed to complement and expedite the adoption of indirect instruments of monetary policy. Appropriate sequencing reflects both operational considerations and macroeconomic effects of structural...

This note, prepared ahead of the G20 Summit (November 15), builds upon the points laid out in the Managing Director’s letter to the Heads of State and Government (November 9). It lays out two tasks ahead for policy makers. Policies for now should cover:(i)implementing and coordinating...

Despite the fragility of authoritative governing institutions at the international level, the politi-cal capacity to deal with global risks is developing. The sense of legitimacy that will ultimately derive from a deeply transnational sense of shared fate continues to lag, but even in that...

Natural disasters, particularly those triggered by heavy rainfall, may cause major damage and death. However, if an accurate early warning is issued, the damage can be mitigated. In Latin America and Brazil, characteristics of socioeconomic development often lead to a disorderly growth of cities...

This paper presents a hybrid model for predicting the occurrence of currency crises by using the artificial intelligence tools. The model combines the learning ability of the artificial neural network (ANN) with the inference mechanism of the empirical mode decomposition (EMD) technique. Thus,...

The European Commission’s Scoreboard of Macroeconomic Imbalances is a rare case of a publicly released early warning system (EWS). That allows for analyzing the preferences of the involved politicians with regard to the two potential errors of an EWS – missing a crisis and issuing a false...

The signals approach as an early warning system has been fairly successful in detecting crises, but it has so far failed to gain popularity in the scientific community because it does not distinguish between randomly achieved in-sample fit and true predictive power. To overcome this obstacle, we...