Monetary policy and financial stability are closely intertwined, and the resilience of the financial system carries weight in this relationship. This paper explores whether the financial system is more resilient as a result of the G20's post-crisis agenda for financial regulatory reform. It...

This paper seeks to inform about a feature of monetary policy that is largely overlooked, yet occupies a central role in modern monetary and financial systems, namely central bank collateral frameworks. Their importance can be understood by the observation that the money at the core of these...

We propose a novel framework to analyze how policy-makers can manage risks to the median projection and risks specific to the tail of gross domestic product (GDP) growth. By combining a quantile regression of GDP growth with a vector autoregression, we show that monetary and macroprudential...

This paper assesses whether and how financial development triggers the occurrence of banking crises. It builds on a database that includes financial development as well as financial access, depth and efficiency for almost 100 countries. Through estimation of a dynamic logit panel model, it...

This paper investigates the effect of financial instability on the design of monetary policy rule for a small open economy. We find evidence that optimal monetary policy rule reacts directly to financial imbalances and, as a result, to the real exchange rate movements. However, optimal rule...

In this paper we build an agent-based model based on a threefold financial accelerator: (i) leverage accelerator - negative shocks on firms' output make banks less willing to loan funds, and firms less willing to make investments, hence a credit reduction follows further reducing the output;...

Despite the various reforms of prudential banking regulation from 1989 to 2002, and the substantial addition of new prudential regulations during that period, there were three key policy errors, all of which had been at the core of the banking disasters of the 1980s, which returned with a...

The importance of China's economy and the instability of China's financial system are in the spotlight recently. This paper uses Austrian Business Cycle Theory to gauge the potential risks of China's economy. The approach of this paper is a sector analysis, focusing on China's monetary and...

Global financial markets have witnessed a secular decline in interest rates since the the mid-1990s. This development was initially largely driven by the effects of globalization on production and increased trade, resulting in lower inflationary forces, especially in developed economies. In the...