This policy brief examines issues associated with the design and implementation of regulatory policymaking in interconnected financial markets. The policy brief explains why international interdependence among nations’ financial markets and regulations can provide an incentive for national...

A dozen years ago, Randall Kroszner, soon to be one of George W. Bush’s economic advisors and a Governor of the Federal Reserve, could comment in a Levy Institute seminar, without fear of contradiction, that there was no evidence to back the "public interest rationale" for the separation of...

Housing finance and, specifically, the subprime private label securitisation market in the US, was at the epicentre of the global financial crisis. Excessive debt expansion in the run-up to the crisis resulted in credit risk, under-identified and mispriced ex ante, and in systemic risk. This...

What determines the sustainability of sovereign debt? In this paper, we develop a model where myopic governments seek electoral popularity but can nevertheless commit credibly to service external debt. They do not default when they are poor because they would lose access to debt markets and be...

This paper examines how cross-border differences in the stringency of bank regulations affect U.S. banks’ international activities. The analysis relies on a unique bank-level dataset on the globally most active U.S. banks’ balance sheet as well as their cross-border, foreign affiliate...

This paper examines the relationship between financial development, CO2 emissions, trade and economic growth using simultaneous-equation panel data models for a panel of 12 MENA countries over the period 1990–2011. Our results indicate that there is evidence of bidirectional causality between...

This report examines the problem of access to credit for low- and moderate- income households. It notes that this problem has two dimensions. On the one hand, there are millions of consumers without access to mainstream sources of consumer credit. On the other hand, many of these same consumers...

En este documento se analiza la relación existente entre el riesgo del sector real y del sistema financiero. Para esto, se estima un modelo FAVAR en el cual se incluyen un conjunto de variables que reflejan la evolución de la dinámica común de las series de los diferentes sectores de la...

On 25 January of 2012, the Banque de France hosted Professor Robert F. Engle, winner of the Nobel Prize in Economics in 2003, to give a lecture. Professor Engle presented his measurement on systemic risk and its implementation in the euro area.