The economics of supranational bank supervision

Thorsten Beck, Consuelo Silva-Buston, Wolf Wagner. International cooperation on bank supervision is still rare. This column analyses data on supervisory cooperation among a global sample of countries between 1995 and 2013 to show that cooperation among bank supervisors is not   […]

Mars or Mercury? The geopolitics of international currency choice

Barry Eichengreen, Arnaud Mehl, Livia Chiţu. Economists have provided detailed analyses of the economic basis of international currency status, but they have paid less attention to the geopolitical underpinnings.  This column sheds light on the geopolitical premium enjoyed by the   […]

Black Monday: Thirty years after

Stephen Cecchetti, Kim Schoenholtz. Black Monday has been referred to as the first contemporary global financial crisis. This column reviews key aspects of the 1987 crash and discusses the subsequent steps taken to improve the resilience of the financial system.   […]

Bail-ins and bailouts: Incentives, connectivity, and systemic stability

Benjamin Bernard, Agostino Capponi, Joseph Stiglitz. Worried about the cost of public bailouts, governments have proposed bail-ins whereby banks contribute to rescuing their debtors. This column analyses the conditions under which bail-in strategies can be credibly implemented, showing that this   […]

Mortgage default during the Great Recession came from real estate investors, not subprime credit holders

Stefania Albanesi, Giacomo De Giorgi, Jaromir Nosal. The Global Crisis narrative has suggested that an expansion of subprime credit was the reason for rising mortgage defaults, leading to the large-scale recession in 2007-09. Taking a closer look at the characteristics of   […]

Banking reform nine years on

John Vickers. The general opinion expressed by those in the financial sector and its regulators is that reform since 2008 has got us to about the right place in terms of limits on bank leverage. But the majority view of   […]

The financial crisis, ten years on

Stephen Cecchetti, Kim Schoenholtz. There is still a notable lack of consensus over when exactly the 2007-09 financial crisis started. This column argues that the crisis began on 9 August 2007, when BNP Paribas announced they were suspending redemptions. In   […]

Long-run money demand redux

Luca Benati, Robert Lucas, Juan Pablo Nicolini, Warren E. Weber Most economists and central bankers no longer consider money supply measures to be useful for conducting monetary policy. One reason is the alleged instability of the relationship between monetary aggregates.   […]

Gross capital inflows to banks, corporates, and sovereigns

Stefan Avdjiev, Bryan Hardy, Sebnem Kalemli-Ozcan, Luis Servén. Capital flows play a key role in the transmission of real and financial shocks across countries, but empirical work on flows by sector is scarce.  This column uses a newly constructed dataset   […]

On the fickleness of capital flows

Barry Eichengreen, Poonam Gupta, Oliver Masetti. According to conventional wisdom, capital flows are fickle. Focusing on emerging markets, this column argues that despite recent structural and regulatory changes, much of this wisdom still holds today. Foreign direct investment inflows are   […]