A large banking system has served Cyprus well to date. It has supported the country's outward-oriented, services-driven economic model and has significantly contributed to output and employment. The question going forward is whether banking system growth can continue indefinitely and at what...

The paper provides the IMF staff views on policy options to mitigate the risks posed by institutions perceived as too-important-to-fail (“TITF"). These institutions have become bigger and more complex since the crisis, and risky practices have started to reappear. The paper emphasizes the need...

Recent events in India have brought a fresh focus upon the problem of regulation in the field of micro-finance. This paper delineates the three distinct aspects where government needs to play a role. The first is to protect the rights of the micro-borrower, the consumer of micro-financial...

The global financial crisis that emerged in mid-2007 has caused considerable economic disruptions in the United States and elsewhere, and exposed major flaws in the global financial system. After examining the origins of the crisis, this paper recommends specific policy responses to resolve the...

We propose an alternative to the LIBOR based on three pillars. (1) Banks that participate in the rate setting process would have to submit bid and ask quotes for interbank lending and commit that they would conduct transactions within that range. If they traded outside of those ranges they would...

This study develops a multi-period structural model to value bank subordinated debt (subdebt) under different regulatory policies. The model provides a complete framework for analyzing how various factors, such as credit and interest rate risks, bank characteristics and regulatory policies...

Financial Inclusion for inclusive growth is a topic of contemporary significance and relevance. This study besides establishing the growth enhancing role of bank-based financial intermediation through empirical evidence has also found that access to finance by the poor is a prerequisite for...

We examine the secondary market transactions of senior bonds issued by banks for the periods prior to and after passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (DFA) in 2010. We find the 136 basis points discount on yield spreads because of the too-big-to-fail (TBTF)...

We investigate whether or not market discipline on banking firms changed after the Dodd-Frank Wall Street Reform and Consumer Protection Act (DFA) of 2010. If market discipline is improved, we should see a lower discount for size on yield spreads, particularly for larger banks. Using secondary...