We develop a two-country DSGE model with global banks to analyze the role of crossborder banking flows on the transmission of a quality of capital shock in the United States to emerging market economies (EMEs). Banks face a moral hazard problem for borrowing from households. EME's banks might be...

The Annual Review of Development Effectiveness (ARDE) 2003, examines the effectiveness of Bank support to borrower countries, in particular, the help to foster reform policies, and institutional frameworks. The Review focuses primarily, although not exclusively, on the years from 1999 through...

Current risk management frameworks are not suitable for testing the long-term implications of balance sheet policies. The current established methodologies, such as interest rate gap analysis or Credit Value-at-Risk are short-term and do not give a clear picture of the long-term risk of a bank....

This work examines the impacts which the Covid-19 pandemic brought to the stability of the European financial sector. Lockdowns, businesses unable to operate and uncertainty about how the pandemic would evolve fueled a sharp recession. From the lessons learned in the global financial crises and...