Most banks around the world delay provisioning for bad loans until it is too late, when cyclical downturns have already set in. The size and timing of loan loss provisions tend to improve with the level of economic development

Analysis of data from emerging economies suggests that, unless properly managed, the introduction of higher minimum bank capital requirements may well induce an aggregate slowdown or contraction of bank credit in these economies

June 2000 - The Basel Committee has proposed linking capital asset requirements for banks to the banks' private sector ratings. Doing so would reduce the capital requirements for banks that lend prudently in high-income countries; the same incentives would not apply in developing countries....

March 2000 - What can the international community do to prevent financial contagion? Chang and Majnoni try to identify and evaluate the public policy implications of financial contagion on the basis of a very simple model of financial crises. In this model, financial contagion can be driven by a...

The regulatory and supervisory practices most effective in promoting good performance and stability in the banking sector are those that force accurate information disclosure, empower private sector monitoring of banks, and foster incentives for private agents to exert corporate control

Instead of focusing the debate about the conduct of monetary policy on whether the normal exchange rate should be fixed or flexible, the focus should be on whether the monetary policy regime appropriately constrains discretion in monetary policymaking. Three frameworks deserve serious discussion...