What is the main limitation of much modern macroeconomic theory, among the failings pointed out by William R. White at the 2010 Mayekawa Lecture? We argue that the main deficiency is a failure to incorporate the possibility of default, including that of banks, into the core of the analysis. With...

This document surveys of the recent developments in the literature of monetary policy analysis for emerging countries. In particular, we describe papers analyzing how the following characteristics impose non-trivial restrictions for policy design in these economies: financial frictions and...

The aim of the paper is to evaluate the importance of the endogenous money theory, and the criterion used is whether this theory enables us to elaborate on and to broaden the explanation of the non-neutrality of money formulated by Keynes in The General Theory. The thesis upheld in this paper is...

In a recent paper, Borio et al (2013a) show that information embedded in the financial cycle can serve to improve measures of potential output and output gaps. It is argued that output may be on an unsustainable path despite low and stable inflation if financial imbalances are accumulating....

Cette étude mesure l’impact de l’augmentation des taux souverains entre les pays européens sur les conditions de financement bancaire, obligataire ainsi que sur les swaps de défaut de crédit bancaires et non bancaires.

Portuguese Abstract: Evoluções recentes em tecnologia levaram à evolução das formas de captação de recursos, em particular por meio dos chamados ICOs (initial coin offerings). A reação regulatória dos vários países foi extremamente diversa. O presente trabalho busca (i) explicar os...

Has financial globalisation compromised central banks' ability to manage domestic financial conditions? This paper summarises the results from our recent research, which tackles this question from the bond market perspective for both advanced and emerging market economies. Using an asset pricing...

A major factor behind this crisis is financialization of the system, with a growing disconnect between the monetary and the real sector. Some proponents of the Islamic finance claim such financial crisis would have been avoided, if asset-backed Islamic finance were adopted. However, while...

The loss of risk-free status for US Treasuries carries significant implications for cash management and collateral operations, the functioning of market interest rate floors, notions of “risk-free” in accounting, financial and portfolio modeling applications, and likely foreshadows an...

In recent weeks and months, a number of market commentators have drawn comparisons between the prevailing economic landscape and previous financial crises, episodes and events. These have ranged from talk of a new ‘Volcker Shock’ to a repeat of the 1987 stockmarket crash, the dot.com burst...