The authors show that systemic risk exerts a significant impact on the behavior of depositors, sometimes overshadowing their responses to standard bank fundamentals. Systemic risk can affect market discipline both regardless of and through bank fundamentals. First, worsening systemic conditions...

To control the expansion of government contingent liabilities and reduce fiscal vulnerability, one must be able to identify and measure them. The authors discuss how this may be done and demonstrate how the assessment of fiscal adjustment may change substantially when a broader picture of...

This paper proposes a framework for analyzing the evolution of financial sectors in economies transiting from command to market structures. Most commentators have tended to regard this"Transition"as an undifferentiated period to be traversed as rapidly as possible. In doing so they ignore the...

The authors propose an integrated approach to minimum bank capital, and loan loss reserves regulation. They break new ground in two main areas. First, the authors provide an explicit measurement of the credit loss distribution for a sample of emerging countries, providing a benchmark for...

The authors analyze how data in public credit registries can be used both to strengthen bank supervision and to improve the quality of credit analysis by financial institutions. Empirical tests using public credit registry (PCR) data were performed in collaboration with the central banks in...

The authors investigate how transparency affects the probability of a financial crisis. They construct a model in which banks cannot distinguish between aggregate shocks and government policy, on the one hand, and firm'quality, on the other. Banks may therefore overestimate firms'returns and...

Using data collected in a survey on risk, and social insurance in Chile, the author funds that workers who entered the labor market after the pension reform of 1981, have a greater"contribution density"than those who contributed to the previous social security system. Further, the expectation of...

The authors assess empirically the impact of contractual savings institutions portfolios (pension funds and life insurance companies) on securities markets, for example, depth and liquidity in the domestic stock market, and depth in the domestic bond market. They discuss how the...

The government of Hungary has contained the main fiscal risks of the transition to a market economy. It has paid off and resolved most problems in the banking and enterprise sectors. Since 1995 it has implemented fiscal adjustment with the objective of long-term fiscal stability rather than an...

Basis risk is the risk attributable to uncertain movements in the spread between yields associated with a particular financial instrument or class of instruments, and a reference interest rate over time. There are seven types of basis risk: Yields on 1) Long-term versus short-term financial...