This paper investigates the relationship between sovereign and bank CDS spreads with reference to their ability to convey timely signals on the default risk of European sovereign countries and their banking systems. By using a sample including six major European economies, we find that sovereign...

Since July 2007 the world economy has experienced a severe financial crisis originating in the U.S. housing market. The crisis has subsequently spread to the financial sectors in European and Asian economies and led to a severe worldwide recession. The existing literature on financial crises...

Luigi Zingales points out that an important policy in resolving the crisis of the 1930s was the cancellation of gold clauses in industrial bond contracts. Congressional Republicans, however, strongly opposed this policy, and interestingly, today Republicans are again the core opposition to...

Economists and politicians have eagerly proposed policies aimed at stopping the decline in housing prices. The government can't and shouldn't be trying to stop price declines, according to Edward Glaeser of Harvard and Joseph Gyourko of Wharton.

Is the U.S. vulnerable to a full-blown dollar crisis? Why are international finance economists scared and jittery, but domestically-oriented macroeconomists much less concerned?

Jonathan Carmel explains that the auctions on which the Paulson plan relies are no magic bullet, and the problems of adverse selection that are causing the banks trouble could continue after $700 billion is spent.

The paper provides new insights into the role of financial liberalization in the South Korean financial crisis using a number of novel approaches. Firstly, primary information regarding the relaxation of financial restraints, such as interest rate ceilings, capital controls and reserve...

This paper provides a novel analysis of the South Korean financial crisis drawing on the findings of a unique survey of IMF/World Bank officials and South Korean economists. The survey reveals that over-optimism and inadequate recognition of financial risks inadvertently led to excessive risk...

This paper examines whether a monetary policy tightening (i.e., an increase in the domestic interest rate) was successful in defending the exchange rate from speculative pressures during the Asian financial crisis. We estimate a bivariate VECM for four Asian countries, and improve upon existing...

The current financial crisis, which has lasted almost one and a half years, is the 19th such crisis in the post-war period in advanced economies. Recent literature classifies the Nordic crises in Norway, Sweden and Finland in late 1980's and early 1990’s among the Big Five crises that have...