There are cases where the governments may not always serve the public interest. The implication seems to be that governments can help out but only if properly constrained. The impact of these ideas on monetary policy led to creation of Central banks. As far as fiscal policymaking is concerned,...

In this paper we first develop an axiomatic measure of financial inclusion. This measure is readily implementable and useful to determine policy priorities to promote financial inclusion. Next, we demonstrate that supply side data on banking services can be usefully employed to measure financial...

Leasing is an important source of medium and long-term financing in developed economies and also in countries with transition economies because leasing is an economically-efficient solution to the question of asset acquisition. Leasing is particularly important in financing to small and...

In this paper, we present two stylized models of the financial system. We make the case that in order to realize the potential of a well-functioning complete financial market, financial system designers and financial service providers will need to think about ways to deliver financial...

This study reviews historical lessons, depicts present challenges, and discusses future perspectives of Chinese bond market. Historical lessons on sovereign right concession and market tumult lead to a quite cautious approach towards the bond market. The legal background, and political...

The focus of this article is on the issue of culture in banking and the problems for Trust and Confidence it has caused in recent years most especially in the UK. A new paradigm of research and public debate is emerging which focuses on culture and incentive structures in banking. It seeks to...

The focus of this article is on the issue of culture in banking and the problems for Trust and Confidence it has caused in recent years most especially in the UK. A new paradigm of research and public debate is emerging which focuses on culture and incentive structures in banking. It seeks to...

This paper explores financial stability policies for the shadow banking system. I tie policy options to economic mechanisms for shadow banking that have been documented in the literature. I then illustrate the role of shadow bank policies using three examples: agency mortgage real estate...

The notion that some banks are “too big to fail” builds on the premise that governments will offer support to avoid the adverse consequences of disorderly bank failures. However, this promise of support comes at a cost: Large, complex, or interconnected banks might take on more risk if they...

We document the cyclical properties of the balance sheets of different types of intermediaries. While the leverage of the bank sector is highly procyclical, the leverage of the nonbank financial sector is acyclical. We propose a theory of a two-agent financial intermediary sector within a...