This paper seeks to understand the interplay between banks, bank regulation, sovereign default risk and central bank guarantees in a monetary union. I assume that banks can use sovereign bonds for repurchase agreements with a common central bank, and that their sovereign partially backs up any...

There is a growing body of evidence that interest rate spreads in Africa are higher for big ba nks compared to small banks. One concern is that big banks might be using their market power to charge higher lending rates as they become larger, more efficient, and unchallenged. In contra st,...

There is a growing body of evidence that interest rate spreads in Africa are higher for big banks compared to small banks. One concern is that big banks might be using their market power to charge higher lending rates as they become larger, more efficient, and unchallenged. In contrast, several...

This paper develops an analytical framework that can be used to anticipate problems in the banking system and enable supervisors to take mitigating actions at an early stage. This paper has two components. First, it develops an early warning indicator that is intended to capture a number of the...

This paper describes concepts and tools behind macroprudential monitoring, and the growing importance of macroprudential tools for assessing the stability of financial systems. This paper also employs a macroprudential approach in examining financial soundness and identifying its determinants....

In the article, we describe the European Commission's (EC) recapitalisation proposals which were announced as part its road map to stability and growth on 12 October 2011. The EC is calling for ‘significantly' higher capital reserves to help banks replenish their balance sheets to withstand...

Bailout expectations have led banks to behave imprudently, holding too little capital and relying too much on short term funding to finance long term investments. This paper presents a model to rationalize a constructive ambiguity approach to liquidity assistance as a solution to forbearance....

This paper provides detailed information on banking structure, permissible banking activities, regulatory structure, deposit insurance schemes, and supervisory practices in each of the 15 European Union countries, as well as in Canada, Japan, Switzerland, and the United States. Comparisons...

This paper uses a competitive neural network model to examine whether the separation of monetary policy and banking supervision has an impact on inflation. Our results show that countries with similar organizations of banking supervision and monetary policy indeed have similar levels of...