Procyclicality In The Financial System

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Procyclicality of Financial Systems in Asia

S. Gerlach,P. Gruenwald
Procyclicality of Financial Systems in Asia Book PDF

Author : S. Gerlach,P. Gruenwald
Publisher : Springer
Page : 182 pages
File Size : 46,8 Mb
Release : 2006-06-28
Category : Business & Economics
ISBN : 9781137001535

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Procyclicality of Financial Systems in Asia by S. Gerlach,P. Gruenwald Pdf

Procyclicality of the financial system is a feature of any normally functioning economy. However, procyclicality can sometimes become 'excessive' leading to undesired effects on the real economy. The challenge that this volume addresses is to define 'excessive' and to identify policy actions that could produce superior outcomes.

Procyclicality of Financial Systems in Asia

Stefan Gerlach
Procyclicality of Financial Systems in Asia Book PDF

Author : Stefan Gerlach
Publisher : Unknown
Page : 182 pages
File Size : 44,6 Mb
Release : 2006
Category : Electronic
ISBN : OCLC:815729409

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Procyclicality of Financial Systems in Asia by Stefan Gerlach Pdf

The procyclicality of financial systems has received an increasing amount of attention from policymakers, academics, and international organizations in recent years. This heightened interest stems from a combination of the ongoing globalization of finance, the role of the financial sector in various emerging market crises in the late 1990s, and the potential impact on financial sectors of the upcoming implementation of the Basel II accord. Some degree of financial sector procyclicality is a characteristic of any normally functioning economy. At issue is whether the observed procyclicality is excessive. The challenge is to define ""excessive"" and to identify policy measures that could produce superior economic outcomes. This volume attempts to do so by collecting recent work on procyclicality in Asian financial systems. For more information on how to purchase a copy of this title, please visit http://www.palgrave.com/economics/imf/index.asp.

Procyclical Behavior of Institutional Investors During the Recent Financial Crisis

Mr.Michael G Papaioannou,Mr.Joonkyu Park,Jukka Pihlman,Han van der Hoorn
Procyclical Behavior of Institutional Investors During the Recent Financial Crisis Book PDF

Author : Mr.Michael G Papaioannou,Mr.Joonkyu Park,Jukka Pihlman,Han van der Hoorn
Publisher : International Monetary Fund
Page : 53 pages
File Size : 47,7 Mb
Release : 2013-09-11
Category : Business & Economics
ISBN : 9781484375556

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Procyclical Behavior of Institutional Investors During the Recent Financial Crisis by Mr.Michael G Papaioannou,Mr.Joonkyu Park,Jukka Pihlman,Han van der Hoorn Pdf

This paper (i) provides evidence on the procyclical investment behavior of major institutional investors during the global financial crisis; (ii) identifies the main factors that could account for such behavior; (iii) discusses the implications of procyclical behavior; and (iv) proposes a framework for sound investment practices for long-term investors. Such procyclical investment behavior is understandable and may be considered rational from an individual institution’s perspective. However, our main conclusion is that behaving in a manner consistent with longterm investing would lead to better long-term, risk-adjusted returns and, importantly, could lessen the potential adverse effects of the procyclical investment behavior of institutional investors on global financial stability.

Procyclicality in the Financial System

William R. White
Procyclicality in the Financial System Book PDF

Author : William R. White
Publisher : Unknown
Page : 28 pages
File Size : 45,8 Mb
Release : 2006
Category : Deposit insurance
ISBN : IND:30000109931042

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Procyclicality in the Financial System by William R. White Pdf

The successful pursuit of the objective of low inflation by central banks in recent decades has also delivered low variability of both inflation and output. At the same time, numerous financial and other "imbalances" (defined here as significant and sustained deviations from historical norms) have emerged. Should these imbalances revert to the mean, there could be significant effects on output growth. Although such an adverse outcome remains only a possibility, the question asked in this paper is whether we might still benefit from a new macrofinancial stabilisation framework in which monetary and regulatory policies gave more attention to avoiding the emergence of imbalances in the first place.

Procyclicality in Central Bank Reserve Management

Jukka Pihlman,Han van der Hoorn
Procyclicality in Central Bank Reserve Management Book PDF

Author : Jukka Pihlman,Han van der Hoorn
Publisher : International Monetary Fund
Page : 29 pages
File Size : 54,9 Mb
Release : 2010-06-01
Category : Business & Economics
ISBN : 9781455201334

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Procyclicality in Central Bank Reserve Management by Jukka Pihlman,Han van der Hoorn Pdf

A decade-long diversification of official reserves into riskier investments came to an abrupt end at the beginning of the global financial crisis, when many central bank reserve managers started to withdraw their deposits from the banking sector in an apparent flight to quality and safety. We estimate that reserve managers pulled around US$500 billion of deposits and other investments from the banking sector. Although clearly not the main cause, this procyclical investment behavior is likely to have contributed to the funding problems of the banking sector, which required offsetting measures by other central banks such as the Federal Reserve and Eurosystem central banks. The behavior highlights a potential conflict between the reserve management and financial stability mandates of central banks. This paper analyzes reserve managers’ actions during the crisis and draws some lessons for strategic asset allocation of reserves going forward.

Macro-Prudential Policies to Mitigate Financial System Vulnerabilities

Stijn Claessens,Swati R. Ghosh,Miss Roxana Mihet
Macro Prudential Policies to Mitigate Financial System Vulnerabilities Book PDF

Author : Stijn Claessens,Swati R. Ghosh,Miss Roxana Mihet
Publisher : International Monetary Fund
Page : 36 pages
File Size : 48,7 Mb
Release : 2014-08-19
Category : Business & Economics
ISBN : 9781498357609

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Macro-Prudential Policies to Mitigate Financial System Vulnerabilities by Stijn Claessens,Swati R. Ghosh,Miss Roxana Mihet Pdf

Macro-prudential policies aimed at mitigating systemic financial risks have become part of the policy toolkit in many emerging markets and some advanced countries. Their effectiveness and efficacy are not well-known, however. Using panel data regressions, we analyze how changes in balance sheets of some 2,800 banks in 48 countries over 2000–2010 respond to specific macro-prudential policies. Controlling for endogeneity, we find that measures aimed at borrowers––caps on debt-to-income and loan-to-value ratios––and at financial institutions––limits on credit growth and foreign currency lending––are effective in reducing asset growth. Countercyclical buffers are little effective through the cycle, and some measures are even counterproductive during downswings, serving to aggravate declines, consistent with the ex-ante nature of macro-prudential tools.

Managing Elevated Risk

Iwan J. Azis,Hyun Song Shin
Managing Elevated Risk Book PDF

Author : Iwan J. Azis,Hyun Song Shin
Publisher : Springer
Page : 124 pages
File Size : 40,8 Mb
Release : 2014-12-11
Category : Business & Economics
ISBN : 9789812872845

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Managing Elevated Risk by Iwan J. Azis,Hyun Song Shin Pdf

This book discusses the risks and opportunities that arise in Emerging Asia given the context of a new environment in global liquidity and capital flows. It elaborates on the need to ensure financial and overall economic stability in the region through improved financial regulation and other policy measures to minimize the emergent risks. "Managing Elevated Risk: Global Liquidity, Capital Flows, and Macroprudential Policy—An Asian Perspective" also explores the range of policy options that may be deployed to address the impact of global liquidity on domestic financial and socio-economic conditions including income inequality. The book is primarily aimed at policy makers, financial market regulators and supervisory agencies to help them improve national regulatory systems and to promote harmonization of national regulations and practices in line with global standards. Scholars and researchers will also gain important information and knowledge about the overall impacts of changing global liquidity from the book.

Powering the Digital Economy: Opportunities and Risks of Artificial Intelligence in Finance

El Bachir Boukherouaa,Mr. Ghiath Shabsigh,Khaled AlAjmi,Jose Deodoro,Aquiles Farias,Ebru S Iskender,Mr. Alin T Mirestean,Rangachary Ravikumar
Powering the Digital Economy Opportunities and Risks of Artificial Intelligence in Finance Book PDF

Author : El Bachir Boukherouaa,Mr. Ghiath Shabsigh,Khaled AlAjmi,Jose Deodoro,Aquiles Farias,Ebru S Iskender,Mr. Alin T Mirestean,Rangachary Ravikumar
Publisher : International Monetary Fund
Page : 35 pages
File Size : 50,6 Mb
Release : 2021-10-22
Category : Business & Economics
ISBN : 9781589063952

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Powering the Digital Economy: Opportunities and Risks of Artificial Intelligence in Finance by El Bachir Boukherouaa,Mr. Ghiath Shabsigh,Khaled AlAjmi,Jose Deodoro,Aquiles Farias,Ebru S Iskender,Mr. Alin T Mirestean,Rangachary Ravikumar Pdf

This paper discusses the impact of the rapid adoption of artificial intelligence (AI) and machine learning (ML) in the financial sector. It highlights the benefits these technologies bring in terms of financial deepening and efficiency, while raising concerns about its potential in widening the digital divide between advanced and developing economies. The paper advances the discussion on the impact of this technology by distilling and categorizing the unique risks that it could pose to the integrity and stability of the financial system, policy challenges, and potential regulatory approaches. The evolving nature of this technology and its application in finance means that the full extent of its strengths and weaknesses is yet to be fully understood. Given the risk of unexpected pitfalls, countries will need to strengthen prudential oversight.

Do Dynamic Provisions Enhance Bank Solvency and Reduce Credit Procyclicality? a Study of the Chilean Banking System

Mr.Jorge A. Chan-Lau
Do Dynamic Provisions Enhance Bank Solvency and Reduce Credit Procyclicality a Study of the Chilean Banking System Book PDF

Author : Mr.Jorge A. Chan-Lau
Publisher : International Monetary Fund
Page : 36 pages
File Size : 44,7 Mb
Release : 2012-05-01
Category : Business & Economics
ISBN : 9781475573312

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Do Dynamic Provisions Enhance Bank Solvency and Reduce Credit Procyclicality? a Study of the Chilean Banking System by Mr.Jorge A. Chan-Lau Pdf

Dynamic provisions could help to enhance the solvency of individual banks and reduce procyclicality. Accomplishing these objectives depends on country-specific features of the banking system, business practices, and the calibration of the dynamic provisions scheme. In the case of Chile, a simulation analysis suggests Spanish dynamic provisions would improve banks' resilience to adverse shocks but would not reduce procyclicality. To address the latter, other countercyclical measures should be considered.

The Fundamental Principles of Financial Regulation

Charles Albert Eric Goodhart,Avinash Persaud,Andrew Crockett,International Center for Monetary and Banking Studies,Hyun Shin
The Fundamental Principles of Financial Regulation Book PDF

Author : Charles Albert Eric Goodhart,Avinash Persaud,Andrew Crockett,International Center for Monetary and Banking Studies,Hyun Shin
Publisher : Geneva Reports on the World Ec
Page : 144 pages
File Size : 49,6 Mb
Release : 2009
Category : Business & Economics
ISBN : UCSD:31822037473311

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The Fundamental Principles of Financial Regulation by Charles Albert Eric Goodhart,Avinash Persaud,Andrew Crockett,International Center for Monetary and Banking Studies,Hyun Shin Pdf

Analytical background -- Nature of systemic risk -- Who should be regulated (by whom) -- Counter-cyclical regulation -- Regulation of liquidity and maturity mismatches -- Other regulatory issues -- The structure of regulation -- Conclusions -- Appendix : the boundary problem in financial regulation -- Discussion and roundtables.

Risk and Liquidity

Hyun Song Shin
Risk and Liquidity Book PDF

Author : Hyun Song Shin
Publisher : OUP Oxford
Page : 205 pages
File Size : 53,6 Mb
Release : 2010-05-27
Category : Business & Economics
ISBN : 9780191613838

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Risk and Liquidity by Hyun Song Shin Pdf

This book presents the Clarendon Lectures in Finance by one of the leading exponents of financial booms and crises. Hyun Song Shin's work has shed light on the global financial crisis and he has been a central figure in the policy debates. The paradox of the global financial crisis is that it erupted in an era when risk management was at the core of the management of the most sophisticated financial institutions. This book explains why. The severity of the crisis is explained by financial development that put marketable assets at the heart of the financial system, and the increased sophistication of financial institutions that held and traded the assets. Step by step, the lectures build an analytical framework that take the reader through the economics behind the fluctuations in the price of risk and the boom-bust dynamics that follow. The book examines the role played by market-to-market accounting rules and securitisation in amplifying the crisis, and draws lessons for financial architecture, financial regulation and monetary policy. This book will be of interest to all serious students of economics and finance who want to delve beneath the outward manifestations to grasp the underlying dynamics of the boom-bust cycle in a modern financial system - a system where banking and capital market developments have become inseparable.

Central Bank Reserve Management

Age Bakker,Ingmar R. Y. van Herpt
Central Bank Reserve Management Book PDF

Author : Age Bakker,Ingmar R. Y. van Herpt
Publisher : Edward Elgar Publishing
Page : 257 pages
File Size : 54,5 Mb
Release : 2007-01-01
Category : Business & Economics
ISBN : 9781782541677

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Central Bank Reserve Management by Age Bakker,Ingmar R. Y. van Herpt Pdf

This book addresses the welfare gains and costs of accumulating foreign exchange reserves and the implications for the functioning of the global financial system. The tremendous growth of central bank reserves has led to an increased focus on raising returns in addition to the traditional preference central banks have for maintaining liquid portfolios. Issues such as asset and currency diversification, the impact of new accounting rules and the profit distribution agreements with the government are analysed, adding new insights to the current debate on the optimal size of central bank reserves. This book brings together a wide range of experts from central banks, investment banks and the academic community.

Financial Crises Explanations, Types, and Implications

Mr.Stijn Claessens,Mr.Ayhan Kose
Financial Crises Explanations Types and Implications Book PDF

Author : Mr.Stijn Claessens,Mr.Ayhan Kose
Publisher : International Monetary Fund
Page : 66 pages
File Size : 50,7 Mb
Release : 2013-01-30
Category : Business & Economics
ISBN : 9781475561005

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Financial Crises Explanations, Types, and Implications by Mr.Stijn Claessens,Mr.Ayhan Kose Pdf

This paper reviews the literature on financial crises focusing on three specific aspects. First, what are the main factors explaining financial crises? Since many theories on the sources of financial crises highlight the importance of sharp fluctuations in asset and credit markets, the paper briefly reviews theoretical and empirical studies on developments in these markets around financial crises. Second, what are the major types of financial crises? The paper focuses on the main theoretical and empirical explanations of four types of financial crises—currency crises, sudden stops, debt crises, and banking crises—and presents a survey of the literature that attempts to identify these episodes. Third, what are the real and financial sector implications of crises? The paper briefly reviews the short- and medium-run implications of crises for the real economy and financial sector. It concludes with a summary of the main lessons from the literature and future research directions.

The Regulatory Responses to the Global Financial Crisis

Mr.Stijn Claessens,Ms.Laura E. Kodres
The Regulatory Responses to the Global Financial Crisis Book PDF

Author : Mr.Stijn Claessens,Ms.Laura E. Kodres
Publisher : International Monetary Fund
Page : 39 pages
File Size : 54,8 Mb
Release : 2014-03-14
Category : Business & Economics
ISBN : 9781484335970

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The Regulatory Responses to the Global Financial Crisis by Mr.Stijn Claessens,Ms.Laura E. Kodres Pdf

We identify current challenges for creating stable, yet efficient financial systems using lessons from recent and past crises. Reforms need to start from three tenets: adopting a system-wide perspective explicitly aimed at addressing market failures; understanding and incorporating into regulations agents’ incentives so as to align them better with societies’ goals; and acknowledging that risks of crises will always remain, in part due to (unknown) unknowns – be they tipping points, fault lines, or spillovers. Corresponding to these three tenets, specific areas for further reforms are identified. Policy makers need to resist, however, fine-tuning regulations: a “do not harm” approach is often preferable. And as risks will remain, crisis management needs to be made an integral part of system design, not relegated to improvisation after the fact.

Financial Innovation

Michael Haliassos
Financial Innovation Book PDF

Author : Michael Haliassos
Publisher : MIT Press
Page : 275 pages
File Size : 41,8 Mb
Release : 2013
Category : Business & Economics
ISBN : 9780262018296

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Financial Innovation by Michael Haliassos Pdf

Prominent economists consider the role of financial innovation in economic crises.