This paper reviews the existing evidence on the impact of foreign banks in the financial stability of the countries where they operate. Foreign banks seem to increase the stability of credit supply. Second, there is no evidence that foreign ownership increases the probability of a banking...

The empirical research we have conducted shows that the central bank design, in particular choosing a narrow central bank objective geared towards price stability, can help reduce the likelihood of a crisis. This is also the case for the independence of the central bank. This result is more in...

It is hardly surprising that one of the biggest and more dynamic economies of the world has a financial system with the same characteristics. The authors review its evolution focusing on its qualitative aspect and, specifically, in the reforms carried out to modernize the system. Recent reforms...

The paper uses the P-STAR model to analyze Spanish prices from 1970 to 1996, adding the foreign price gap to the standard domestic definition of the P-STAR model (the domestic price gap) to assess the role German price movements played in Spanish inflation. The domestic price gap turns out to be...

This paper builds upon the empirical literature on the macroeconomic impact of real exchange rate depreciations for a sample of 27 emerging economies. We find that real exchange rate depreciations tend to increase a country's risk premium. This effect is neither linear nor symmetric: large real...

The new Basel II Framework will be important for emerging countries as a big part of them has declared to be willing to introduce such Framework in a more or less near future and international banks that are operating in these economies will abide to the new Framework through its holding. Basel...

This paper sets out a political economy model of strategic exchange rates, focusing in the importance of external lobbying. Applying it for the recent history of the Japanese yen, we show that pressure from the U.S. trade negotiators contributed to an appreciation of the Japanese yen, as well as...

This article summarizes recent literature about advanced indicators of crisis in emerging countries, as well as problems concerning their elaboration and potential utility for the Authorities and main players in financial markets. The first part describes the main characteristics of recent...

This article briefly describes the main characteristics of the Financial Sector Assessment Programs (FSAPs) of the IMF and the World Bank. It focuses on the stress tests as they are one of the main pillars of the program and at the same time they are used by banks and regulatory entities for...

This paper shows empirically that China's trade balance is sensitive to fluctuations in the renminbi real effective exchange rate. However, the current size of the trade surplus is such that exchange rate policy, alone, will probably not be able to address the imbalance. The reduction in the...