This paper documents the link between risk, stability, and access to credit markets in an emerging economy. It presents annual credit loss distributions of Chilean banks for the period 1999-2005, providing the first empirical evidence of the cyclical pattern of expected losses and unexpected...

In the globalizing economy, national policymakers are often forced to accept the challenge of financial integration. Faced with the potentially destabilizing effects of international financial markets, they have to strengthen financial regulation, importing international best practices and...

Panel data for 63 countries in 1960-97 reveal no robust relationship between the development of financial intermediaries and the volatility of growth. Beck, Lundberg, and Majnoni extend the recent literature on the link between financial development and economic volatility by focusing on the...

The general recognition that bank capital should provide a buffer for unexpected losses assumes that expected losses are considered in setting loan loss provisions. Failure to provide coherent and internationally accepted regulation of provisions for loan losses reduces the usefulness of minimum...

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. Chiuri, Ferri, and Majnoni test for emerging economies the...

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. Using historical...

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 combination...

Powell, Mylenko, Miller, and Majnoni 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...

Majnoni, Miller, and Powell 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...