This paper discusses adjustments of capital account restrictions and exchange rate regimes in East Asia. Monetary authorities have two options for these adjustments: gradual adjustments or rapid adjustments. We analyze the costs and benefits for both adjustment options in each area, i.e.,...

This paper describes concepts and tools behind macroprudential monitoring, and the growing importance of macroprudential tools for assessing the stability of financial systems. This paper also employs a macroprudential approach in examining financial soundness and identifying its determinants....

This paper develops an analytical framework that can be used to anticipate problems in the banking system and enable supervisors to take mitigating actions at an early stage. This paper has two components. First, it develops an early warning indicator that is intended to capture a number of the...

This paper describes concepts and tools behind macroprudential monitoring and the growing importance of macroprudential tools for assessing the stability of financial systems. This paper also employs a macroprudential approach in examining financial soundness and identifying its determinants....

This paper analyses several severe financial crises observed in the history of capitalism which led to a longer period of stagnation or low growth. Comparative case studies of the Great Depression, the Latin American debt crisis of the 1980s and the Japanese crisis of the 1990s and 2000s are...

This paper shows, for the first time, how liquidity infusions from government bailouts affect loan modification in the mortgage market. The design of the Pooling and Service Agreement leads mortgage servicers to prefer foreclosure to modification when the servicers are liquidity constrained....

At the time they occurred, the savings and loan insolvencies were considered the worst financial crisis since the Great Depression. Contrary to what was then believed, and in sharp contrast with 2007-09, they in fact had little macroeconomic significance. S&L remediation cost between 2 and 3...

This paper revisits Keynes's writings from Indian Currency and Finance (1913) to The General Theory (1936) with a focus on financial instability. The analysis reveals Keynes's astute concerns about the stability/fragility of the banking system, especially under deflationary conditions. Keynes's...

The collapse of Lehman in mid September 2008 was a momentous event. Yet whether Lehman really had to fail is an issue that has not received the kind of scrutiny it deserves. The reason for that seems to be the public statement made by then Treasury Secretary Paulson and then Fed Chairman...