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Working Paper
Bank for International Settlements (BIS)
(
2023
May
)
We show that macroprudential regulation significantly dampens the impact of global financial shocks on emerging markets. Specifically, a tighter level of regulation reduces the sensitivity of GDP growth to capital flow shocks and movements in the VIX.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2023
May
)
This study analyzes the magnitude of the US monetary policy spillover on the Indonesian local currency government bond yield, particularly when the Federal Reserve (Fed) implemented the quantitative easing (QE), tapering off, Fed fund rate (FFR) normalization, and quantitative tightening over the past decades.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
Indonesia
Working Paper
Asian Development Bank Institute (ADBI)
(
2023
May
)
Using a time-varying parameter SVAR model over the period 1994 to 2021, this paper provides estimates of exchange rate pass-through (ERPT) to both producer and consumer prices for nine emerging Asian economies.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2023
May
)
Low inflation hit the Japanese economy shortly after the burst of the bubble in stocks and real estate in 1991 and has haunted the domestic economy ever since. The bubbles were partly attributable to prolonged monetary easing in the second half of 1980s, which was conducted to increase domestic demand and mitigate the recession induced by the appreciation of the Japanese yen.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Japan
Policy Brief
Asian Development Bank (ADB)
(
2023
May
)
Financial technology (fintech) development has spread rapidly around the world, especially in the last few years, amid new regulatory policies and the now-waning coronavirus disease (COVID-19) pandemic. This is lowering transaction costs, boosting the variety of financial services, and expanding access and financial inclusion in markets.
Tags:
Financial inclusion
Financial technology and innovation
Scope:
World
Publication
World Bank Group (WBG)
(
2023
March
)
Fintech - the application of digital technology to financial services - is reshaping the future of finance. Digital technologies are revolutionizing payments, lending, investment, insurance, and other financial products and services - and the COVID-19 pandemic has accelerated this process.
Tags:
Financial inclusion
Financial technology and innovation
Scope:
World
Publication
Asian Development Bank (ADB)
(
2023
March
)
As digital transformation accelerates globally, new innovative technology solutions to enhance financial inclusion are being developed more rapidly than ever. The development of cryptocurrency markets, and their growing popularity among consumers, has generated significant interest among governments globally in exploring the prospect of central bank-issued digital currencies - as a mechanism that could leverage digital finance technologies and as infrastructure to enhance the reach and value of formal financial products and services among the unbanked or underserved.
Tags:
Financial inclusion
Central Bank Digital Currencies (CBDCs)
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2023
March
)
This paper explores why some episodes of US yield increases result in investor retrenchment from emerging markets and others do not. To answer this, the paper identifies episodes of sharp increases in US 10-year Treasury yields and explore under which conditions these are associated with negative outcomes in emerging markets.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Scope:
World
Working Paper
European Central Bank (ECB)
(
2023
June
)
What is the effect of Central Bank Digital Currency (CBDC) on financial stability? This paper answers this question by studying a model of financial intermediation with an endogenously determined probability of a bank run and a remunerated CBDC that provides consumers with an alternative to bank deposits.
Tags:
Financial inclusion
Central Bank Digital Currencies (CBDCs)
Scope:
World
Research Paper
The South East Asian Central Banks (SEACEN)
(
2023
June
)
Emerging Markets (EM) capital flows are volatile, procyclical, risk sensitive, tail-dependent, and have asymmetric outcomes with changing global financial conditions. The evolving nature of capital flows, notably with a shift towards market-based financing intermediated by the non-bank financial sector since the Great Financial Crisis (GFC) of 2008-09, has contributed significantly to the tail-dependence and risk-sensitivity of such flows.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Scope:
World
Book
Asian Development Bank (ADB)
(
2023
June
)
The world faces a dual environmental crisis through climate change and biodiversity loss. State-owned enterprises (SOEs) are in a unique position to take a leading role in confronting these challenges and shifting economic activity from polluting to green. This requires a shift in existing business models, particularly in the energy, finance, transport, and water sectors, which in Asia are traditionally dominated by SOEs.
Tags:
Macrofinancial stability measures
Sustainable finance measures
Green finance
Scope:
Asia
Working Paper
Bank for International Settlements (BIS)
(
2023
June
)
Individuals have concerns about sharing data, but without access to personal information data-intensive fintechs cannot prosper, nor consumers benefit from their services. Well-designed privacy protection regulation needs to address this conflict. This paper studies how the California Consumer Privacy Act (CCPA), a 2020 privacy law that grants users control over data and mitigates concerns over sharing them, affects bank and fintech lending in the mortgage market.
Tags:
Financial inclusion
Financial technology and innovation
Macrofinancial stability measures
Financial sector regulation
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2023
June
)
A sustainable financing strategy for SMEs should aim to enhance a low-cost collateral-free supply of loans to SMEs with good track records of repayments to banks. This paper suggests two alternative financing mechanisms to overcome certain borrowing constraints of SMEs.
Tags:
Financial inclusion
Financial inclusion for MSMEs
Macrofinancial stability measures
Sustainable finance measures
Scope:
World
Research Paper
The South East Asian Central Banks (SEACEN)
(
2023
July
)
Big Data analytics play an important role in today’s digital era, including the support of the formulation of both monetary and macroprudential central bank policies. In addition, the central bank also utilises Big Data for the supervision and regulation of the financial system, such as the application of supervisory technology (SupTech) and regulatory technology (RegTech).
Tags:
Financial inclusion
Financial technology and innovation
Scope:
Indonesia
Working Paper
Asian Development Bank Institute (ADBI)
(
2023
July
)
Using panel data of cities in the People’s Republic of China from 2011 to 2019, this paper analyzes the impact of digital finance on low-carbon transition derived from a super-efficiency slacks-based measure data envelopment analysis.
Tags:
Financial inclusion
Ditigalization of finance, cybersecurity, and data privacy
Macrofinancial stability measures
Sustainable finance measures
Green finance
Scope:
China, People's Republic of
Policy Paper
Organisation for Economic Co-operations and Development (OECD)
(
2023
July
)
Discussions on Central Bank Digital Currencies (CBDCs) have so far mostly focused on the potential risks that these currencies could represent for financial intermediation and financial stability. It is important, however, to also consider how they could contribute to the welfare of citizens, and how they can be leveraged to help uphold certain democratic values. This paper explores how the design and implementation of CBDCs can help countries mitigate threats to individual liberties and human rights, as well as promote the equitable treatment of citizens, the protection of privacy, and citizens’ trust in central banks. The sound governance architecture of CBDC systems at the national and international level can further support these objectives.
Tags:
Financial inclusion
Central Bank Digital Currencies (CBDCs)
Scope:
World
Policy Paper
Organisation for Economic Co-operations and Development (OECD)
(
2023
July
)
This report explores issues, opportunities and challenges for financial consumers in relation to sustainable finance. It examines current trends in terms of consumer demand for and experience with sustainable finance products, as well as new risks to consumers posed by sustainable finance products. This report also explores financial consumer protection tools and responses available to policy makers and oversight authorities, illustrated by selected examples of how these tools and responses are being deployed around the world. Finally, this report offers a number of policy considerations to help guide policy makers and oversight authorities responsible for financial consumer protection.
Tags:
Macrofinancial stability measures
Sustainable finance measures
Scope:
World
Publication
Asian Development Bank Institute (ADBI)
(
2023
July
)
Environmental, social, and governance (ESG) investment is rapidly developing and expanding from developed to developing countries. Large companies and financial institutions are increasingly embracing ESG investment to reduce greenhouse gas (GHG) emissions, facilitated by advancements in digital technology.
Tags:
Macrofinancial stability measures
Sustainable finance measures
Green finance
Sustainable finance concerning social and governance
Scope:
World
Working Paper
The South East Asian Central Banks (SEACEN)
(
2023
July
)
Motivated by the 2022 uptick in headline inflation and the marked shift towards more restrictive monetary policies globally, this paper examines the sacrifice ratio, i.e., the percentage cost of actual production lost to every one percentage point decrease in (trend) inflation, for selected Southeast Asian economies. Results indicate that upon adopting a contractive monetary policy, GDP growth dropped by up to 0.5%, confirming that monetary authorities’ disinflationary policies typically trigger declines in both output and employment. However, as even minor adjustments to the way of determining the sacrifice ratio lead to varying results, caution ought to be applied when deriving potential (monetary) policy recommendations.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
Southeast Asia
Working Paper
Asian Development Bank (ADB)
(
2023
July
)
This study investigates how development of the local currency (LCY) bond market brings stability in the financial market. The analysis is based on annual economy panel data set for 1989-2020.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Currency unions, intervention, and manipulation
Scope:
World
Policy Paper
Organisation for Economic Co-operations and Development (OECD)
(
2023
January
)
Data sharing arrangements are evolving from Open Banking to Open Finance. This next stage of the evolution builds upon existing frameworks to expand data access and data source sharing beyond payment/transaction data, while also including other areas of financial activity (e.g. insurance). This paper analyses the different types of data sharing frameworks currently available in OECD and non-OECD member countries. It examines the specific rules and conditions of such frameworks around data access and sharing, consumer safeguards, and operational and technical specifications. It also discusses learnings from existing frameworks on the impact that such arrangements have had on customers and financial markets.
Tags:
Financial inclusion
Ditigalization of finance, cybersecurity, and data privacy
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
World
Report
Asian Development Bank (ADB)
(
2023
February
)
Regional integration in Asia and the Pacific is progressing steadily. Regional integration, as measured by the Asia-Pacific Regional Cooperation and Integration Index, has progressed steadily over the past 15 years and remained stable in 2020 despite the pandemic.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
Asia
Working Paper
European Central Bank (ECB)
(
2023
February
)
We study the effects of negative interest rate policies (NIRP) on the transmission of monetary policy through cross-border lending. Using bank-level data from international financial centres - the United Kingdom, Hong Kong, China, and Ireland - we examine how NIRP in the economies where banks have their headquarters influences cross-border lending from financial-centre affiliates.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
Europe
Hong Kong, China
Working Paper
Asian Development Bank (ADB)
(
2023
February
)
This paper investigates whether the uncovered interest parity (UIP) will hold more firmly if the local currency bond markets (LCBMs) are more developed, and the presence of nonbank financial institutions (NBFIs) is expanded.
Tags:
Regional financial cooperation and integration
Financial and capital market development
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2023
April
)
This paper studies the consequences for business cycles and welfare of introducing an interest-bearing retail CBDC, competing with bank deposits as medium of exchange, into an estimated 2-country DSGE environment.
Tags:
Financial inclusion
Central Bank Digital Currencies (CBDCs)
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2023
April
)
This paper analyses the links between advances in financial technology, investors’ sophistication, and the composition and returns of their financial portfolios. It develops a simple portfolio choice model under asymmetric information and derive some theoretical predictions.
Tags:
Financial inclusion
Financial technology and innovation
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2023
April
)
This chapter discusses the structure and functioning of the spot foreign exchange (FX) market. The market structure, which has become far more complex over the past three decades, has mostly evolved endogenously as the global FX market is subject to notably less regulatory oversight than equity and bond markets in most countries.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Foreign exchange market development
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2022
September
)
This paper studies the relationship between international bond flows and exchange rate returns for a panel of emerging market economies (EMEs). Specifically, it investigates whether international net bond flows are correlated with subsequent changes in the value of the local currency against the US dollar.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
World
Working Paper
European Central Bank (ECB)
(
2022
October
)
Exchange rate movements affect the economy through changes in net exports, i.e. the trade channel, and through valuation changes in assets and liabilities denominated in foreign currencies, i.e. the financial channel. This paper investigates the macroeconomic and financial effects of U.S. dollar (USD) exchange rate fluctuations in small open economies.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
World
Report
Organisation for Economic Co-operations and Development (OECD)
(
2022
October
)
Sustainable finance, including the increasing array of related financial products, is attracting the attention of investors, policy makers, and civil society stakeholders because of its potential to deliver long-term enterprise value that aligns with societal values and contributes to sustainability and climate-related objectives.
Tags:
Macrofinancial stability measures
Sustainable finance measures
Scope:
World
Working Paper
The South East Asian Central Banks (SEACEN)
(
2022
October
)
Using high-frequency, proprietary data on daily net non-resident portfolio flows to emerging markets, the study finds in the time domain connectedness framework that, to varying degrees, there is less interconnectedness in non-resident debt and equity portfolio flows to our sample of emerging market (EM) economies during normal times.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Scope:
Southeast Asia
Working Paper
Bank for International Settlements (BIS)
(
2022
October
)
This paper finds that deep contractions have highly persistent scarring effects, depressing the level of GDP at least a decade hence. Drawing on a panel of 24 advanced and emerging economies from 1970 to the present, it shows that these effects are nonlinear and asymmetric: there is no such persistence following less severe contractions or large expansions.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Scope:
World
Policy Brief
Asian Development Bank (ADB)
(
2022
November
)
Recent years have witnessed a surge. in sustainable bond markets, not only in terms of financing amounts but also in the form of innovative instruments. The expanding sustainable bond family now includes green bonds, social bonds, sustainability bonds, sustainability-linked bonds, and transition bonds
Tags:
Macrofinancial stability measures
Sustainable finance measures
Green finance
Sustainable finance concerning social and governance
Regional financial cooperation and integration
Financial and capital market development
Scope:
Southeast Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2022
November
)
This paper examines real and financial spillovers to safe haven financial flow destinations due to risk-off shocks in global financial markets. Using country-specific structural vector autoregression (VAR) models over the period 1990 to 2021, it shows that dynamics for Japan appear to be different to those of Switzerland and the US in four main ways.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2022
November
)
Banks of different sizes respond differently to interest on reserves (IOR) policy. For low IOR rates, large banks are non-responsive to IOR rate changes, leading to weak pass-through of IOR rate changes to deposit rates. In these circumstances, a central bank digital currency (CBDC) may be used to provide competitive pressure to drive up deposit rates and improve monetary policy transmission.
Tags:
Financial inclusion
Central Bank Digital Currencies (CBDCs)
Scope:
World
Publication
World Bank Group (WBG)
(
2022
November
)
Climate change mitigation and adaptation efforts are urgently needed across Southeast Asia. The financial sector can play a critical role in supporting countries in their journey toward greater resilience and sustainability, but it must adapt to do so effectively. This report shows that while sustainable finance has experienced widespread expansion, sustainable financial markets remain small and unable to meet the funding needs of ASEAN-5 economies for their various sustainability objectives.
Tags:
Macrofinancial stability measures
Sustainable finance measures
Scope:
Southeast Asia
Working Paper
Bank for International Settlements (BIS)
(
2022
May
)
Using a unique dataset of around half a million Chinese firms that use a QR code-based mobile payment system, this paper finds that (i) the creation of a digital payment footprint allows firms to access credit provided by the same big tech company; (ii) transaction data generated via QR code generate spillover effects on access to bank credit; and (iii) there are positive effects of access to big tech credit on sales, including during the Covid-19 shock. The findings suggest that access to innovative payment methods helps micro firms build up credit history, and that using big tech credit can ease access to bank credit.
Tags:
Financial inclusion
Ditigalization of finance, cybersecurity, and data privacy
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2022
May
)
This paper provides new evidence on the spillover effects from US interest rate changes, focusing on factors that are pertinent to the current conjuncture: weak recovery prospects in emerging market and developing economies (EMDEs), and the confluence of macroeconomic shocks shaping the path of interest rates in the US.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2022
March
)
A core-periphery model with financial frictions, imperfect financial integration, and cross-border banking is used to assess the magnitude of regulatory spillovers and the gains from international macroprudential policy coordination. A core global bank lends to its affiliates in the periphery and banks in both regions are subject to risk-sensitive capital regulation.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Publication
Asian Development Bank (ADB)
(
2022
March
)
Digital financial services focused on innovative financial technologies (fintech) can benefit individuals, businesses, and governments. An appropriate policy and enabling regulatory environment for developing responsible and inclusive digital financial services can help expand inclusive economic growth and address the Sustainable Development Goals (SDGs).
Tags:
Financial inclusion
Financial technology and innovation
Scope:
Asia
Working Paper
European Central Bank (ECB)
(
2022
June
)
This paper identifies the effect of climate change-related regulatory risks on credit reallocation. The evidence suggests that effects depend borrower’s region. Following an increase in salience of regulatory risks, banks reallocate credit to US firms that could be negatively impacted by regulatory interventions.
Tags:
Macrofinancial stability measures
Financial sector regulation
Scope:
World
Publication
World Bank Group (WBG)
(
2022
June
)
This report provides an assessment of the stability of the financial systems of selected Pacific Island Countries (PICs) in the context of COVID-19 and emerging risks. The report brings together an analysis of information provided by the central banks of the PICs covered by this study over the last two years.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
The Pacific
Publication
Asian Development Bank (ADB)
(
2022
June
)
A fundamental shift in the way capital is being allocated within global markets is currently taking place. The triple threats of climate change, environmental degradation, and social inequalities - together with the impacts of the coronavirus disease (COVID-19) - highlight the need for new financing mechanisms to ensure a sustainable future. The awareness of these threats by the financial sector has led to the development of a sustainable finance market to directly address these challenges at scale.
Tags:
Financial resilience and stability
Capital market
Scope:
Southeast Asia
Publication
Asian Development Bank (ADB)
(
2022
June
)
The primary objective of this report is to ascertain the most recent status of technology adoption by Cross-Border Settlement Infrastructure Forum (CSIF) member organizations - including central securities depositories (CSDs) and central banks in the Association of Southeast Asian Nations (ASEAN) plus the People’s Republic of China (PRC), Japan, and the Republic of Korea (collectively known as ASEAN+3) region - and to share that information with CSIF members, thereby promoting technical advancement in the region’s market infrastructure system.
Tags:
Financial inclusion
Financial technology and innovation
Regional financial cooperation and integration
Banking and capital market integration
Cross-border settlement infrastructure
Scope:
Southeast Asia
Working Paper
European Central Bank (ECB)
(
2022
June
)
This paper studies the dynamics of contagion across the banking, insurance and shadow banking sectors of 16 advanced economies in the period 2006-2018. It constructs Granger causality-in-risk networks and introduce higher-order aggregate networks and temporal node centralities in an economic setting to capture non-Markovian network features.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Working Paper
European Central Bank (ECB)
(
2022
June
)
This paper studies the long-run evolution of bank risk and its links to the macroeconomy. Using data for 17 advanced economies, this paper shows that the riskiness of bank assets declined materially between 1870 and 2016. But even though bank assets have become safer, the losses on these assets are associated with increasingly large output gaps.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2022
July
)
This paper lays out a small open economy model incorporating key features of EME economic and financial structure: high exchange rate pass-through to import prices, low passthrough to export prices and shallow domestic financial markets giving rise to occasionally binding leverage constraints.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Macrofinancial stability measures
Capital flow management
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2022
July
)
Financial centres that cater predominantly to non-residents – which is referred to as cross-border financial centres (XFCs) – are important intermediaries of cross-border financial flows. For analysing capital flows and international interconnectedness, it can be useful to distinguish countries that are home to XFCs from other countries.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
World
Publication
Asian Development Bank Institute (ADBI)
(
2022
July
)
Set against the context of a growing financial technology (fintech) sector in Asia, this book provides insights on fintech’s impacts on economic recovery during the coronavirus disease (COVID-19) pandemic. Helped by the region’s smooth adoption of digitalization, notably in the area of digital payments, the backdrop for the continued development of fintech firms in Asia was already favorable.
Tags:
Financial inclusion
Financial technology and innovation
Scope:
Asia
Working Paper
Bank for International Settlements (BIS)
(
2022
July
)
This paper lays out a model of risk capacity for global portfolio investors in which swings in exchange rates can affect their risk-taking capacity in a Value-at-Risk framework. Exchange rate auctuations induce shifts in portfolio holdings of global investors, even in the absence of currency mismatches on the part of the borrowers.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2022
January
)
Does foreign capital improve the quality of domestic institutions? Consistent with an institutional quality channel of capital flows, this paper shows that industries that are more dependent on “good” institutions to operate grow more than others after foreign capital flows into the private sector.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Scope:
World
Publication
Asian Development Bank (ADB)
(
2022
January
)
This report was prepared as part of the Asian Development Bank’s Strengthening Micro, Small, and Medium Enterprises Finance Project, which aims to evaluate the access to finance of micro, small, and medium enterprises (MSMEs) in Kazakhstan and identify constraints to and demand for financing.
Tags:
Financial inclusion
Financial inclusion for MSMEs
Scope:
Kazakhstan
Technical Note
World Bank Group (WBG)
(
2022
January
)
Small and medium enterprises (SMEs) represent the economic backbone of most developed and emerging countries. Globally, SMEs account for more than 90 percent of all businesses and more than 50 percent of employment. SMEs are also significant contributors of economic activity, representing on average 60 to 70 percent of the GDP of most countries worldwide.
Tags:
Financial inclusion
Financial inclusion for MSMEs
Financial technology and innovation
Scope:
World
Publication
World Bank Group (WBG)
(
2022
January
)
This note examines the implications of digital innovation for market structure and attendant policies, including financial and competition regulation. There have been several surveys of regulatory responses. This note takes a step back, to look at what the economic theory of banking and financial intermediation can tell us about how technology may drive industrial organization in the sector, and how that might inform further policy responses.
Tags:
Financial inclusion
Financial technology and innovation
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2022
January
)
Should a central bank deviate from price stability to promote financial stability? This paper studies this question through the lens of a textbook New Keynesian model augmented with capital accumulation and search-for-yield behaviors that give rise to endogenous financial crises.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2022
January
)
Focusing on Asian economies over the period 2006 to 2019, this paper finds that while nonbank finance appears to complement rather than substitute credit provision by the traditional banking sector, weaker regulatory quality is an important driving factor.
Tags:
Macrofinancial stability measures
Financial sector regulation
Macroprudential policy coordination
Scope:
Asia
Technical Note
World Bank Group (WBG)
(
2022
January
)
Fintech is transforming the global financial landscape. It is creating new opportunities to advance financial inclusion and development in Emerging Markets and Developing Economies (EMDEs), but also presents risks that require updated supervision policy frameworks. Fintech encompasses new financial digital products and services enabled by new technologies and policies.
Tags:
Financial inclusion
Financial technology and innovation
Scope:
World
Technical Note
World Bank Group (WBG)
(
2022
January
)
Open banking has emerged strongly in the past few years as a system to give customers the right to share with parties they trust the information that banks have about them in a secure manner and also as a way to open up processes and services in banking. The main objectives pursued by regulatory frameworks that define open banking are generally encouraging innovation and fostering competition, resulting in new products and services at competitive prices to the benefit of consumers.
Tags:
Macrofinancial stability measures
Financial sector regulation
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
World
Report
Asian Development Bank (ADB)
(
2022
February
)
Asia and the Pacific saw fragile, uneven recovery in cross-border economic activities and movement of people in 2021, and the recovery momentum has weakened due to the Omicron variant. Merchandise trade, cross-border investment, capital flows, and international remittances have improved markedly since the latter half of 2020.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
Asia
Working Paper
European Central Bank (ECB)
(
2022
February
)
Recent research developed under the ECB research task force on Monetary Policy, Macroprudential Policy and Financial Stability highlights the existence of trade-offs and spillovers that monetary policy and macroprudential authorities face when deciding on their policy interventions.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Publication
World Bank Group (WBG)
(
2022
February
)
This paper studies the distribution of credit during crisis times and its impact on firm indebtedness and macroeconomic risk. Whereas policies can help firms in need of financing, they can lead to adverse selection from riskier firms and higher default risk. The paper analyzes a large-scale program of public credit guarantees in Chile during the COVID-19 pandemic using unique transaction-level data on the demand and supply of credit, matched with administrative tax data, for the universe of banks and firms.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Working Paper
European Central Bank (ECB)
(
2022
February
)
This paper shows that FinTech lending affects credit markets and real economic activity using a unique data set of a Peer-to-Business platform for which we have the universe of loan applications. It finds that FinTech serves high quality and creditworthy small businesses who already have access to bank credit.
Tags:
Financial inclusion
Financial inclusion for MSMEs
Financial technology and innovation
Scope:
World
Policy Brief
Asian Development Bank (ADB)
(
2022
December
)
Amid the ongoing coronavirus disease (COVID-19) pandemic, risks from the Russian invasion of Ukraine, rising inflation, and tighter financial conditions are raising economic uncertainty while global growth and trade have yet to recover to pre-pandemic levels.
Tags:
Financial inclusion
Ditigalization of finance, cybersecurity, and data privacy
Scope:
World
Working Paper
European Central Bank (ECB)
(
2022
December
)
How do real interest rates affect financial fragility? This paper studies this issue in a model in which bank borrowing is subject to rollover risk. A bank’s optimal borrowing trades off the benefit from investing additional funds into profitable assets with the cost of greater risk of a run by bank creditors.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
World
Background Note
Organisation for Economic Co-operations and Development (OECD)
(
2022
December
)
In recent years, environmental, social and governance (ESG) investing has evolved to become a leading approach for investors seeking to pursue forms of sustainable finance. This report takes stock of the major trends and current state of the ESG and climate-aligned investing in Asia and provides policy considerations to strengthen ESG investing and to help finance the climate transition.
Tags:
Macrofinancial stability measures
Sustainable finance measures
Green finance
Sustainable finance concerning social and governance
Scope:
Asia
Book
Asian Development Bank (ADB)
(
2022
August
)
Over the past 50 years, the financial sector has become one of the most digitalized, globalized, and regulated sectors of the global economy. Since the late 1960s, with the advent of the first ATM and the handheld calculator, finance has rapidly digitized and globalized in developed markets and most recently in emerging markets and developing countries.
Tags:
Financial inclusion
Financial technology and innovation
Scope:
Asia
Working Paper
European Central Bank (ECB)
(
2022
August
)
Overlapping portfolios constitute a well-recognised source of risk, providing a channel for financial contagion induced by the market price impact of asset deleveraging. This paper introduces a novel method to assess the market price impact on a security-by-security basis from historical daily traded volumes and price returns.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Financial resilience and stability
Risks arising from non-financial stressors
Scope:
World
Book
Asian Development Bank (ADB)
(
2022
August
)
Disasters brought about by natural hazard events and extreme weather conditions affect men and women differently. Differences in socioeconomic status, ability to access resources, and prevailing social and cultural norms between men and women impact the way they respond to and are affected by disasters. Given the low rate of women’s participation in the labor force and that women are mostly self-employed in the informal economy, they are more likely than men to live in the poorest households.
Tags:
Macrofinancial stability measures
Sustainable finance measures
Disaster risk financing
Scope:
World
Publication
World Bank Group (WBG)
(
2022
August
)
Over the past two years, the World Bank has been working with Pacific Island Countries (PICs) to assess the impact of the COVID 19 pandemic on their financial systems and provide guidance to the PIC prudential authorities on policy issues relating to strengthening the resilience of financial systems in the region.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Global and regional financial safety nets
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
The Pacific
Publication
Asian Development Bank (ADB)
(
2021
October
)
Regional cooperation and integration is a multifaceted and multidimensional process in which neighboring economies expand linkages and coordinate policies to attain common objectives. Progress in this regard has been pivotal in Asia and the Pacific to improving economic growth and social inclusion, and for reducing poverty and enhancing financial and institutional stability. Initiatives have therefore emerged to capture the increasingly complex dimensions of regional cooperation and integration, including in areas such as digitalization, health security, and environmental policy.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Financial integration implications
Scope:
Asia
Working Paper
Asian Development Bank (ADB)
(
2021
October
)
The Regional Comprehensive Economic Partnership (RCEP) presents strong potential to mold regional trade and investment patterns well into the future and to influence the direction of global economic cooperation at a challenging time. This paper evaluates the RCEP and estimates its potential effects on income, trade, economic structure, factor returns, and employment using a computable general equilibrium mode.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Asia
Report
Organisation for Economic Co-operations and Development (OECD)
(
2021
October
)
In recent years, many governments, international organisations and private institutions have endeavoured to analyse climate transition-related risks and opportunities with respect to the transition to low-carbon economies, including implications for the global financial system. An orderly low-carbon transition through financial systems would require that financial markets efficiently allocate capital, assess and transfer risks, and facilitate price discovery.
Tags:
Macrofinancial stability measures
Sustainable finance measures
Green finance
Scope:
World
Publication
World Bank Group (WBG)
(
2021
November
)
Over the years, the demand for seamless and inexpensive cross-border payments has grown in parallel with growth in international e-commerce, remittances and tourism. Yet, cross-border payments have not kept pace with the intensive modernization that has characterized domestic payment services worldwide. Cross-border payments continue to be largely based on the old correspondent banking model, which has not quite benefited from the same flow of innovations as domestic payments have over the recent decades.
Tags:
Financial inclusion
Central Bank Digital Currencies (CBDCs)
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2021
November
)
In just a few years, central banks have rapidly ramped up their research and development effort on central bank digital currencies (CBDCs). A growing body of economic research informs these activities, often focusing on the “reserves for all” aspect of CBDCs for retail use. However, CBDCs should be considered in the full context of the digital economy and the centrality of data, which raises concerns around competition, payment system integrity and privacy.
Tags:
Financial inclusion
Central Bank Digital Currencies (CBDCs)
Scope:
World
Technical Note
World Bank Group (WBG)
(
2021
November
)
Money performs three functions: medium of exchange (facilitates exchange between two parties), store of value (stores value from one period to another), and unit of account (acts as numeraire of value). There are a number of different types of money that perform these functions.
Tags:
Financial inclusion
Central Bank Digital Currencies (CBDCs)
Scope:
World
Working Paper
European Central Bank (ECB)
(
2021
November
)
This paper develops early warning models for financial crisis prediction by applying machine learning techniques to macrofinancial data for 17 countries over 1870-2016. Most nonlinear machine learning models outperform logistic regression in out-of-sample predictions and forecasting.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Working Paper
World Bank Group (WBG)
(
2021
November
)
This paper proposes a novel theory of reserve accumulation that emphasizes the role of an independent central bank.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Global and regional financial safety nets
Scope:
World
Policy Brief
Asian Development Bank (ADB)
(
2021
November
)
For decades, international trade has played a vital role in driving unprecedented economic growth in many emerging countries. Such an outcome could have been even more promising and inclusive if all viable trade activities were realized, but some are constrained due to adequate financing, particularly those from smaller businesses.
Tags:
Financial inclusion
Financial inclusion for MSMEs
Scope:
Central Asia
Working Paper
European Central Bank (ECB)
(
2021
November
)
This paper quantifies spillbacks from US monetary policy based on structural scenario analysis and minimum relative entropy methods applied in a Bayesian proxy structural vector-autoregressive model estimated on data for the time period from 1990 to 2019. It finds that spillbacks account for a non-trivial share of the overall slowdown in domestic real activity in response to a contractionary US monetary policy shock.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Working Paper
World Bank Group (WBG)
(
2021
November
)
Cross-border capital flows are expected to lead to increased international risk sharing by facilitating borrowing and lending in global financial markets. This paper examines risk-sharing outcomes of various types of capital flows (foreign direct investment, portfolio equity, debt, remittance, and aid flows) in a large sample of emerging market and developing economies.
Tags:
Macrofinancial stability measures
Capital flow management
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2021
November
)
This paper examines real and financial spillovers from monetary policy shocks originating in the US and the People’s Republic of China (PRC) to advanced and emerging economies in Asia over the period 2000 to 2020. Using a structural panel vector autoregression approach, Asian economies overall are more susceptible to spillovers to GDP, inflation, and the current account emanating from monetary policy shocks in the PRC than to those from the US.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
Asia
Research Paper
World Bank Group (WBG)
(
2021
May
)
This paper explores and summarizes the evolution in bank capital regulations and bank risk after the global financial crisis. Using a new survey of bank regulation and supervision covering more than 120 economies, it shows that regulatory capital increased, but some elements of capital regulations became laxer. Analyzing bank level data, it also documents the importance of defining bank regulatory capital narrowly as the quality of capital matters in reducing bank risk. This is particularly true for banks that have more discretion in the computation of regulatory capital ratios and are subject to weaker market monitoring.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Macrofinancial stability measures
Financial sector regulation
Scope:
World
Working Paper
Asian Development Bank (ADB)
(
2021
May
)
Cross-border bank credit is dominated by a small number of very large links between banks in one country and borrowers in another. Most of these large cross-border banking links are mainly between major advanced economies. However, some of these advanced economies, whose financial sector ownership is more concentrated, engage in greater cross-border lending especially to borrowers in countries whose banking systems are less concentrated.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
Asia
Publication
Asian Development Bank (ADB)
(
2021
May
)
The ongoing coronavirus disease (COVID-19) pandemic has prompted a reversal of hard-won development gains for the region and across the globe. At the same time, as governments take measures to keep the spread of the virus in check, the strain on the world’s economies is considerable. The pandemic moreover threatens to further entrench existing financial vulnerabilities in Asia, including credit constraints, a lack of financial inclusion, and substantial investment financing gaps, among others.
Tags:
Financial inclusion
Financial technology and innovation
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2021
May
)
The last fifteen years have witnessed remarkable interventions of governments in financial markets. Central banks have purchased securities at unprecedented levels via quantitative easing and foreign exchange intervention. These interventions have constituted the core policy response to crises such as the global financial crisis of 2008-09, the European sovereign debt crisis of 2011-12, and the ongoing Covid-19 pandemic.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
World
Working Paper
European Central Bank (ECB)
(
2021
May
)
Since the global financial crises, many countries have implemented macroprudential policies with the aim to render the financial system more resilient to shocks and limit the procyclicality of the financial system. This paper presents theoretical and empirical evidence on the effectiveness of macroprudential policy, on both, financial stability and economic growth focusing on capital measures and borrower-based measures.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Technical Note
World Bank Group (WBG)
(
2021
May
)
Governments are often the largest users of a country’s payment systems. They frequently make payments to and receive payments from individuals and businesses. There is considerable variation in these payments across counterparty actors, use cases, and payment mechanisms.
Tags:
Financial inclusion
Ditigalization of finance, cybersecurity, and data privacy
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2021
May
)
The effect of US monetary policy on EMEs is one of the fiercely debated issues in international finance. This paper contributes to this debate using micro- and macro-level analyses from India over the period 2004-2019.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
India
United States
Working Paper
Asian Development Bank Institute (ADBI)
(
2021
March
)
An all-inclusive financial system is one of the channels through which information and communication technology (ICT) affects economic growth. Digital financial inclusion is an evolving phenomenon that enhances the ease of access to and availability of formal financial services.
Tags:
Financial inclusion
Ditigalization of finance, cybersecurity, and data privacy
Regional financial cooperation and integration
Financial and capital market development
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2021
March
)
In this current era of the fourth industrial revolution, both the negative and positive effects of financial inclusion raise the question of whether digital finance can be a solution for financial stability through attaining sustainable economic growth or not.
Tags:
Financial inclusion
Ditigalization of finance, cybersecurity, and data privacy
Scope:
Asia
Working Paper
Asian Development Bank (ADB)
(
2021
March
)
More than 20 years after the Asian financial crisis, the region’s continued high reliance on United States (US) dollar-denominated funding has significant implications for the transmission of global financial conditions to domestic financial and macroeconomic circumstances. Given limited domestic capital market-based financing solutions, a high reliance on funding denominated in US dollars renders countries vulnerable to changing global financial and liquidity conditions.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
Asia
Technical Note
World Bank Group (WBG)
(
2021
June
)
Financial capability is the capacity to act in one’s financial interest, given socioeconomic and environmental conditions. Financially capable individuals who make good financial decisions and interact effectively with financial service providers (FSPs) are more likely to achieve their financial goals and therefore improve their households’ welfare. The expectation is that financial education programs, when effectively designed and delivered, can be implemented as tools to increase consumers’ financial capability.
Tags:
Financial inclusion
Financial literacy and education
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2021
June
)
CBDCs should let central banks provide a universal means of payment for the digital era. At the same time, such currencies must safeguard consumer privacy and maintain the two-tier financial system. We set out the economic and operational requirements for a “minimally invasive” design - one that preserves the private sector’s primary role in retail payments and financial intermediation - for CBDCs and discuss the implications for the underlying technology.
Tags:
Financial inclusion
Central Bank Digital Currencies (CBDCs)
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2021
July
)
New financial technologies - including those underpinning cryptocurrencies - herald broader access to the financial system, quicker and more easily verifiable settlement of transactions and payments, and lower transaction costs. Domestic and cross-border payment systems are on the threshold of transformation, with significant gains in speed and lowering of transaction costs on the horizon.
Tags:
Financial inclusion
Ditigalization of finance, cybersecurity, and data privacy
Financial technology and innovation
Macrofinancial stability measures
Sustainable finance measures
Regional financial cooperation and integration
Banking and capital market integration
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2021
January
)
This paper studies the dynamic properties of sovereign bonds in emerging market economies and their associated risk premiums. It focuses on the properties of credit spreads, exchange rates, and their interaction. Relying on the term structure of local currency bonds issued by Asia-Pacific sovereigns, it finds that local variables are significant in the dynamics of currency and credit risk, and the components of bond risk premiums reflecting these risks. Local currency bonds dramatically improve the investment frontier.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Scope:
Asia
Report
Asian Development Bank (ADB)
(
2021
February
)
The coronavirus disease (COVID-19) pandemic has weighed heavily on health and economic systems worldwide; it severely disrupted Asia’s cross-border trade and economic activities, and exposed vulnerabilities of global supply chains. a Yet, Asia immensely benefited from open trade and investment, with the region’s export-driven growth strategy and attractiveness to foreign direct investment (FDI) lifting millions out of poverty over half a century.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
Asia
Working Paper
Bank for International Settlements (BIS)
(
2021
February
)
This paper analyses how macroprudential policies (MaPs), largely applied to banks and to a lesser extent borrowers, affect non-bank financial intermediation (NBFI). Using data for 24 of the jurisdictions participating in the Financial Stability Board’s monitoring exercise over the period 2002-17, this paper studies the effects of MaP episodes on bank assets and on those NBFI activities that may involve bank-like financial stability risks (the narrow measure of NBFI).
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Policy Brief
World Bank Group (WBG)
(
2021
February
)
Firms from emerging economies increased their bond financing significantly after the 2008-09 global financial crisis. The patterns of corporate borrowing in East Asia and Latin America offer very different lessons. In East Asia, the main component behind the overall growth in bond financing was an expansion in domestic bond issuances, in domestic currency, by more and smaller firms.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Scope:
East Asia
Publication
Asian Development Bank (ADB)
(
2021
December
)
Asian financial systems have achieved significant development and integration over the past decades. From mostly state-funded and bank-dominated during the period of industrialization in the 1970s and 1980s, the region’s financial systems have become more diversified and market-based. While most Asian financial systems remain bank-dominated, the scope of financial products and services has broadened and new corporate financing sources are proliferating.
Tags:
Regional financial cooperation and integration
Financial and capital market development
Financial integration implications
Scope:
Southeast Asia
Publication
Asian Development Bank (ADB)
(
2021
August
)
If well-designed and implemented, central bank digital currencies (CBDCs) likely offer the best solution to the financial inclusion and remittance problems that bedevil the Pacific region. However, the CBDC is a complex piece of software and a complex digital framework capable of generating economy-wide benefits and shocks. The development of a safe, efficient, and accessible CBDC by any Pacific country will require considerable expertise and a deep understanding of the design issues this fundamentally new form of currency gives rise to in this context.
Tags:
Financial inclusion
Central Bank Digital Currencies (CBDCs)
Scope:
The Pacific
Working Paper
World Bank Group (WBG)
(
2021
August
)
This paper uses a unique survey data set of 105 central banks to investigate whether investment policies for central bank foreign reserve portfolios are linked to the governance arrangements for reserve management. The paper evaluates whether a central bank’s investment decision-making structure impacts how much risk institutions take in their reserve management operations and the level of diversity in their reserve portfolios.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Global and regional financial safety nets
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2021
August
)
This paper discusses the business correspondent (BC)-agent banking model in India against the backdrop of community-based rural livelihood programs, its relevance in facilitating financial inclusion in underserved rural geographies, and its potential to address the gender gap in financial inclusion.
Tags:
Financial inclusion
Ditigalization of finance, cybersecurity, and data privacy
Scope:
India
Working Paper
Bank for International Settlements (BIS)
(
2021
August
)
Using a model of strategic interactions between two countries, this paper investigates the gains to international coordination of financial regulation policies, and how these gains depend on global lending conditions. When global lending conditions are determined non-cooperatively, this paper shows that coordinating regulatory policies leads to a Pareto improvement relative to the case of no cooperation.
Tags:
Macrofinancial stability measures
Financial sector regulation
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2021
August
)
This paper investigates the impacts of the COVID-19 pandemic and the large-scale social distancing (PSBB) policy on Indonesia’s financial technology (fintech) markets. It also elaborates the roles that fintech companies can play in the national economic recovery.
Tags:
Financial inclusion
Financial technology and innovation
Scope:
Indonesia
Research Paper
World Bank Group (WBG)
(
2021
April
)
Fintech is increasingly recognized as a key enabler for financial sectors worldwide, enabling more efficient and competitive financial markets while expanding access to finance for traditionally underserved consumers.
Tags:
Financial inclusion
Financial technology and innovation
Macrofinancial stability measures
Financial sector regulation
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2021
April
)
This paper examines the role of local currency bond markets (LCBMs) and foreign investor participation in these markets in capital flow volatility in emerging Asian economies over the period 1999 to 2020.
Tags:
Macrofinancial stability measures
Capital flow management
Regional financial cooperation and integration
Financial and capital market development
Scope:
Asia
Working Paper
World Bank Group (WBG)
(
2020
September
)
This paper analyzes the main trends and patterns of nominal lending interest rates and lending-deposit interest rate spreads in emerging markets and developing economies. Using data from 140 emerging markets and developing economies, analysis shows that nominal lending rates and spreads declined between 2003 and 2017, with regional heterogeneity.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Scope:
World
Working Paper
World Bank Group (WBG)
(
2020
September
)
Cross-border banking in emerging markets and developing economies has expanded across most World Bank regions and has become large relative to some home and host economies. This paper analyzes recent trends of bank activities of financial groups headquartered in 46 emerging markets and developing economies, as well as the ownership structure of 51 prominent financial groups from emerging markets and developing economies.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2020
September
)
This paper studies the effects of sterilized foreign exchange market intervention in a model with financial frictions and imperfect capital mobility. The central bank operates a managed float regime and issues sterilization bonds that are imperfect substitutes (as a result of economies of scope) to investment loans in bank portfolios.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
World
Working Paper
World Bank Group (WBG)
(
2020
September
)
This paper examines the influence of sovereign credit ratings and relative risk ratings on private capital flows to 26 emerging and frontier market economies, using quarterly data for 1998-2017.
Tags:
Macrofinancial stability measures
Capital flow management
Scope:
World
Publication
World Bank Group (WBG)
(
2020
September
)
The BSP’s regulatory framework is broadly effective for the size and complexity of the Philippine banking system, but legislative gaps continue to hinder effective supervision of banks. The BSP has a well-resourced, experienced and highly committed staffing complement, but there is an ongoing need to develop and maintain adequate expertise in certain complex areas (e.g. risk modelling).
Tags:
Macrofinancial stability measures
Financial sector regulation
Scope:
Philippines
Working Paper
Bank for International Settlements (BIS)
(
2020
October
)
This paper proposes a method for computing the distribution of the potential fiscal cost of a banking crisis - a key input in assessing the adequacy of a country’s fiscal buffers.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2020
October
)
This paper explores the global footprint of Chinese banks and compare it with that of other bank nationalities. Chinese banks have become the largest cross-border creditors for almost half of all emerging market and developing economies (EMDEs).
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
China, People's Republic of
Working Paper
Asian Development Bank (ADB)
(
2020
October
)
This study examines how public and private debt buildup is related to currency depreciation pressure. The empirical analysis of a panel dataset of 59 advanced and emerging markets reveals that both private and public debt exacerbate currency vulnerability.
Tags:
Financial resilience and stability
Capital market
Public and private sector debt and leverage
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
World
Publication
Asian Development Bank (ADB)
(
2020
October
)
Global financial integration has deepened Asia’s global market connections over the past 2 decades. The benefits of greater financial integration include increased and more sophisticated sources of funding, more efficient capital allocation, better governance, higher investment and growth, and risk-sharing.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Regional financial cooperation and integration
Financial integration implications
Scope:
Asia
Publication
Asian Development Bank (ADB)
(
2020
October
)
This paper explores the rationale for a green recovery being at the heart of post-COVID-19 economic planning. A number of countries have already embarked on creating green recovery strategies, while green programs that had been in place pre-COVID-19 also provide a base to build upon, in other countries.
Tags:
Macrofinancial stability measures
Sustainable finance measures
Green finance
Scope:
Asia
Working Paper
Bank for International Settlements (BIS)
(
2020
October
)
Understanding gross capital flows is increasingly viewed as crucial for both macroeconomic and financial stability policies, but theory is lagging behind many key policy debates. This paper fills this gap by developing a two-country DSGE model that tracks domestic and cross-border gross positions between banks and households, with explicit settlement of all transactions through banks.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2020
October
)
This paper presents new evidence on international financial market integration using stock analyst earnings forecasts from 37 countries. By examining cash flow and discount rate news co-movements, it finds that the financial and economic aspects of global market integration have diverged over time as financial integration has developed particularly more rapidly than economic integration over the past decade.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2020
November
)
This paper investigates the impact of infectious diseases on the evolution of sovereign credit default swap (CDS) spreads for a panel of 77 advanced and developing countries. Using annual data over the 2004-2020 period, this paper finds that infectious-disease outbreaks have no discernible effect on CDS spreads, after controlling for macroeconomic and institutional factors. However, the granular analysis using high-frequency (daily) data indicates that the COVID-19 pandemic has had a significant impact on market-implied sovereign default risk.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2020
November
)
This paper is based on a study that examines the impact of the Covid-19 pandemic on Indonesia’s financial markets and monetary policy dynamics.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
Indonesia
Working Paper
ASEAN+3 Macroeconomic Research Office (AMRO)
(
2020
November
)
This study employs VAR-MGARCH model to investigate the spillover across the sovereign bond markets between the US and ASEAN-4 (Indonesia, Malaysia, the Philippines and Thailand) economies. The empirical results confirm the return spillover from the US to ASEAN-4, while the bidirectional influence in volatility exists between the US and ASEAN-4.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Scope:
Southeast Asia
Working Paper
Bank of International Settlements (BIS)
(
2020
November
)
Banking flows to emerging market economies (EMEs) are a potential source of vulnerability capable of generating boom-bust cycles. The causal effect of such in flows on EME macro-financial conditions is hard to pin down empirically and should be key to well-informed policy design.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2020
May
)
Financial technology (Fintech) has prompted authorities to consider their potential financial stability benefits, risks, and effective regulation. Recent developments suggest that regulatory approaches and their legal foundations need to augment entity-based regulation with increasing focus on activities and risks as market structure changes. This paper draws on recent international experiences in modernizing legal and regulatory frameworks for payment services.
Tags:
Financial inclusion
Financial technology and innovation
Scope:
World
Research Paper
The South East Asian Central Banks (SEACEN)
(
2020
May
)
This SEACEN research topic was awarded to Bank Indonesia in 2019 to investigate the development and prospects of new forms of financial intermediation in four Southeast Asian (ASEAN) countries, namely Indonesia, Malaysia, Thailand and Singapore, as well as to analyse their implications for monetary policy.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Southeast Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2020
March
)
Globally, 1.7 billion adults still lack access to formal financial services, with a large percentage living in South Asia and Sub-Saharan Africa. Current financial inclusion strategies provide these vulnerable populations with access to a wide array of financial services that aim to build more inclusive and financially resilient societies. With the movement towards Fintech and over 67% of the world’s population having a mobile phone, digital financial literacy is gaining momentum.
Tags:
Financial inclusion
Financial literacy and education
Scope:
South Asia
Working Paper
Asian Development Bank (ADB)
(
2020
March
)
To explore the determinants of peer-to-peer (P2P) lending expansion, this study examines factors that impact P2P lending using a sample of 62 economies over the period 2015-2017. It investigates the effects of financial development and financial literacy on the expansion of P2P lending.
Tags:
Financial inclusion
Financial literacy and education
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2020
March
)
Rapid developments in financial technology (fintech) are expected to contribute to improvements in financial inclusion and well-being. This paper investigates how financial literacy and other factors contributed to the adoption of fintech services in Japan, using data from a survey conducted by the Bank of Japan, including 25,000 individuals aged from 18 to 79.
Tags:
Financial inclusion
Financial literacy and education
Financial technology and innovation
Scope:
Japan
Working Paper
Asian Development Bank Institute (ADBI)
(
2020
March
)
Financial services in Thailand are undergoing rapid transformation. The adoption of digital payments has been growing at an exponential rate, thanks to various collaborative initiatives between the public and private sectors, as well as competition between financial services providers themselves.
Tags:
Financial inclusion
Financial literacy and education
Financial technology and innovation
Scope:
Thailand
Working Paper
Organisation for Economic Co-operations and Development (OECD)
(
2020
March
)
This paper examines global credit intermediation through the lens of financial markets and financial intermediaries in the post-crisis period during which highly accommodative monetary policies contributed to investors’ search for yield. It reviews the extent to which non-bank intermediation contributed to the rise of sovereign and corporate debt levels and exuberance in global credit markets.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2020
March
)
This paper presents the findings of a survey among 18 central banks from Asia and the Pacific regarding their views on and policies regarding sustainable finance. It also reviews recent developments in selected Asia and Pacific countries concerning sustainable finance to illustrate the actions that monetary and financial authorities have already taken to address climate and environmental risks, and to scale up sustainable finance.
Tags:
Macrofinancial stability measures
Sustainable finance measures
Scope:
Asia
Working Paper
International Monetary Fund (IMF)
(
2020
March
)
Countries in the MENAP and CCA regions have the lowest levels of financial inclusion of small and medium enterprises (SMEs) in the world. The paper provides empirical evidence on the drivers of SME access to finance for a large sample of countries, and identifies key policy priorities for these two regions: economic and institutional stability, competition, public sector size and government effectiveness, credit information infrastructure (e.g., credit registries), the business environment (e.g., legal frameworks for contract enforcement), and financial supervisory and regulatory capacity.
Tags:
Financial inclusion
Financial inclusion for MSMEs
Scope:
Central Asia
Middle East
Working Paper
Asian Development Bank Institute (ADBI)
(
2020
June
)
This paper empirically examines the reaction of global financial markets across 38 economies to the COVID-19 outbreak, with a special focus on the dynamics of capital flow across 14 emerging market economies.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Macrofinancial stability measures
Capital flow management
Scope:
World
Working Paper
National Bureau of Economic Research (NBER)
(
2020
June
)
This paper introduces a new financial vulnerability index for emerging market economies by exploiting key differences in their business cycles relative to those of advanced economies. Information on the domestic price of risk, cost of dollar hedging and market-based measures of bank vulnerability combine to generate indexes significantly more effective in capturing macro-financial vulnerability and stress compared to those based on information in trade and global factors.
Tags:
Financial resilience and stability
Risks arising from non-financial stressors
Financial stress in developing and emerging markets
Scope:
World
Book
Asian Development Bank (ADB)
(
2020
June
)
Central banks are facing growing challenges posed by aging, low productivity, new technology, and innovation especially after the global financial crisis triggered by the collapse of Lehman Brothers in 2008.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Financial inclusion
Ditigalization of finance, cybersecurity, and data privacy
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Background Paper
World Bank Group (WBG)
(
2020
June
)
The Government of Indonesia is aiming to diversify the country’s food system by developing and strengthening high-value-added and more nutrient-rich value chains. In this regard, the government is focusing on diversifying into horticulture and small ruminant livestock. Undertaking Value Chain Analysis (VCA) is a critical part of this process as it helps in the identification of constraints and opportunities in relevant sectors. Agriculture funding and finance are vital components of this analytical process.
Tags:
Financial inclusion
Agricultural financing
Scope:
Indonesia
Report
The South East Asian Central Banks (SEACEN)
(
2020
June
)
Emerging and frontier economies globally, including in Asia, experienced one of the sharpest reversals and sudden stops of portfolio flows following the heightened risk aversion from the onset of COVID-19 in early March 2020.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Macrofinancial stability measures
Capital flow management
Scope:
Southeast Asia
Policy Brief
Asian Development Bank (ADB)
(
2020
June
)
The global economy is on the brink of a recession as the coronavirus disease (COVID-19) pandemic has severely impacted businesses, jobs, and incomes. The pandemic-induced economic slowdown is driven by both the supply and demand sides of the economy. As many economies have imposed lockdown measures, factories have been closed, supply chains disrupted, and productivity has fallen, with mounting economic losses.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
World
Working Paper
Asian Development Bank (ADB)
(
2020
June
)
Fragility that periodically erupts into a full-blown financial crisis appears to be an integral feature of market-based financial systems in spite of the emergence of sophisticated risk management tools and regulatory systems. If anything, the increased frequency of modern crises underscores how difficult it is to diversify away systemic risk and that perceptions of perfectly stable financial systems are normally flawed, even if the source of the next crisis remains well concealed to the expert eye.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Scope:
Asia
Working Paper
World Bank Group (WBG)
(
2020
July
)
This paper studies whether there is a connection between finance and growth at the firm level. It employs a new dataset of 150,165 equity and bond issuances around the world, matched with income and balance sheet data for 62,653 listed firms in 65 countries over 1990-2016.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Scope:
World
Policy Brief
Organisation for Economic Co-operations and Development (OECD)
(
2020
July
)
The COVID-19 crisis has triggered major disruptions for exchange rates and global capital flows. Cross-border portfolio investment stopped in many emerging markets as well as in some advanced economies in March 2020. Countries have not had to resort to capital controls. To support foreign currency liquidity, several emerging markets have intervened in the foreign exchange market and relaxed rules on capital inflows.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Macrofinancial stability measures
Capital flow management
Scope:
World
Policy Brief
Asian Development Bank (ADB)
(
2020
July
)
The COVID-19 pandemic has yet again unraveled global financial markets, putting Asia’s financial resilience to the test. As the economic losses associated with the pandemic are set to rise, Asian stocks have plunged and short-term portfolio flows reversed sharply in March 2020, putting local currencies under severe pressure.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2020
July
)
Financial innovation in the form of new delivery channels, products, and providers has helped push out the frontier of access to finance and thus increase the bankable and banked population. Mobile money and crowdfunding platforms are prime examples for this.
Tags:
Financial inclusion
Financial technology and innovation
Scope:
World
Publication
Asian Development Bank (ADB)
(
2020
July
)
The Cross-Border Settlement Infrastructure Forum (CSIF) was established under the Asian Bond Markets Initiative (ABMI) after being endorsed in May 2013 in Delhi at the meeting of finance ministers and central bank governors of the Association of Southeast Asian Nations (ASEAN), the People’s Republic of China, Japan, and the Republic of Korea - a grouping that is collectively known as ASEAN+3.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Cross-border settlement infrastructure
Scope:
Southeast Asia
Review Paper
Bank of Japan (BoJ)
(
2020
July
)
In recent years, turnovers of Foreign Exchange (FX) trading in Singapore and Hong Kong, China have outweighed those of Japan, and the gap between the two cities and Japan continues to stretch. The two cities consolidate trading of G10 currencies by institutional investors and others by advancing electronic trading.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Foreign exchange market development
Scope:
Hong Kong, China
Japan
Singapore
Working Paper
World Bank Group (WBG)
(
2020
July
)
Capital controls, policy measures used by governments to regulate cross-country financial flows, have become standard policy options in many emerging market economies. This paper will focus on what capital controls reveal about the state of the economy and the implications of such revelation for policy efficacy.
Tags:
Macrofinancial stability measures
Capital flow management
Scope:
World
Departmental Paper
International Monetary Fund (IMF)
(
2020
July
)
Technology is changing the landscape of the financial sector, increasing access to financial services in profound ways. These changes have been in motion for several years, affecting nearly all countries in the world. During the COVID-19 pandemic, technology has created new opportunities for digital financial services to accelerate and enhance financial inclusion, amid social distancing and containment measures. At the same time, the risks emerging prior to COVID-19, as digital financial services developed, are becoming even more relevant.
Tags:
Financial inclusion
Financial technology and innovation
Scope:
World
Working Paper
Asian Development Bank (ADB)
(
2020
February
)
This paper aims at identifying effective macroprudential policy (MPP) interventions and analysing the macroeconomic conditions that promote them. It defines effective MPP interventions as those that stabilize its underlying target variable, such as credit growth, house price growth, etc.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Working Paper
Asian Development Bank (ADB)
(
2020
February
)
The insulating properties of flexible exchange rates have long been a highly contentious issue in emerging markets - not least in Asian emerging markets. A number of recent theoretical and empirical studies question whether a trade-off exists between rigid exchange rate regimes and insulation from foreign shocks when the degree of international capital mobility is high.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2020
February
)
This paper examines the emergent role of sustainable finance and investment in Japan and scrutinizes the need for the Japanese financial system to mitigate growing climate risks and support the transition of the Japanese economy to a low-carbon, sustainable pathway.
Tags:
Macrofinancial stability measures
Sustainable finance measures
Green finance
Sustainable finance concerning social and governance
Scope:
Japan
Working Paper
Bank for International Settlements (BIS)
(
2020
December
)
This paper investigates the links among US monetary policy, bank capital, and risk taking in international bank lending. Using syndicated loan data, this paper finds that low US interest rates spur the origination of risky dollar-denominated international loans through two distinct mechanisms.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Scope:
World
Working Paper
World Bank Group (WBG)
(
2020
August
)
This paper analyzes bank stock prices around the world to assess the impact of the COVID-19 pandemic on the banking sector. Using a global database of policy responses during the crisis, the paper also examines the role of financial sector policy announcements on the performance of bank stocks.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2020
August
)
Central bank digital currencies (CBDCs) are receiving more attention than ever before. Yet the motivations for issuance vary across countries, as do the policy approaches and technical designs. This paper investigates the economic and institutional drivers of CBDC development and take stock of design efforts.
Tags:
Financial inclusion
Central Bank Digital Currencies (CBDCs)
Scope:
World
Working Paper
Organisation for Economic Co-operations and Development (OECD)
(
2020
August
)
Over the past two decades, Asian economies have experienced rapid capital market growth and profound changes in the structure of their financial systems. This paper analyses key developments in advanced and emerging Asian economies since the global financial crisis, focusing on market intermediation of sovereign and corporate debt, equity market development, and the growth of alternative finance and structured products.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Asia
Working Paper
Organisation for Economic Co-operations and Development (OECD)
(
2020
August
)
The paper empirically examines the implementation record of international financial regulation of the banking sector. The study finds that the size of the banking sector and the presence of global systemically important banks (GSIBs) are positively associated with a stronger implementation record.
Tags:
Macrofinancial stability measures
Financial sector regulation
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2020
April
)
Since the Asian financial crisis of 1997-1998, the Association of Southeast Asian Nations (ASEAN) has continuously worked on the context of financial integration and put tremendous effort into ensuring financial stability in the region. Two ASEAN Economic Community (AEC) blueprints have been endorsed with elements of financial integration and liberalization, toward its goal of achieving regional financial integration and the complement of financial inclusion and financial stability.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Southeast Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2020
April
)
Foreign-currency exposures on an economy’s external balance sheet may jeopardize financial stability when the exchange rate depreciates. In fact, theory suggests that in such an environment it may be optimal for monetary policy in a floating regime to reduce exchange rate variation in order to dampen financial cycles by mimicking foreign monetary policy rather than focusing exclusively on stabilizing macroeconomic fundamentals.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
Asia
Publication
World Bank Group (WBG)
(
2020
April
)
The options presented in this paper were developed at the request of the Government of Pakistan (GoP) to contribute to the country’s disaster resilience and overall sustainable development. They are in line with Pakistan@100: Shaping the Future which detailed essential elements of sustainable growth for Pakistan including with disaster risk financing among them. They aim to comprehensively address financial resilience of Pakistan to natural disasters and increase access of the country to immediate and long-term financial resources in the aftermath of a disaster.
Tags:
Macrofinancial stability measures
Sustainable finance measures
Disaster risk financing
Scope:
Pakistan
Research Paper
The South East Asian Central Banks (SEACEN)
(
2020
April
)
During the last 25 years, many advanced economies (AD) as well as several emerging economies (EME), have adopted inflation targeting to control the general rise in the price level, as price stability has been found to be a prerequisite for sustained economic growth as well as full employment.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
Southeast Asia
Publication
International Monetary Fund (IMF)
(
2019
October
)
This paper looks empirically at some economic effects of volatile exchange rates and financial conditions and examines policy responses for managing such volatility. It also sheds light on some economic costs that stem from volatile capital flows and exchange rates and analyzes how countries deploy their policy toolkits in response. The data-driven analysis should contribute to ongoing reflections about how to manage volatile capital flows and exchange rates both in Asian EMEs and more broadly.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Currency and foreign exchange market
Exchange rate stability and volatility
Macrofinancial stability measures
Capital flow management
Scope:
Asia
Report
Asian Development Bank (ADB)
(
2019
November
)
Asia’s trade growth is expected to decelerate further in 2019, amid persistent global trade tensions. In 2018, Asia’s trade (by volume) grew by 4.0%, slower than the 7.3% growth in 2017. This came in tandem with the slowdown in global trade growth from 4.6% to 3.0%.
Tags:
Financial inclusion
Financial technology and innovation
Regional financial cooperation and integration
Financial integration implications
Scope:
Asia
Report
The South East Asian Central Banks (SEACEN)
(
2019
June
)
Net resident capital outflows of SEG member economies amounted to US$170 billion in end-2018. Net purchases of foreign assets by domestic residents (financial account assets) reached US$966 billion, while net purchases of domestic assets by non-residents (financial account liabilities) summed up to US$796 billion, bringing the net resident capital outflows to around US$170 billion, excluding net errors and omissions.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Macrofinancial stability measures
Capital flow management
Scope:
Southeast Asia
Working Paper
Bank for International Settlements (BIS)
(
2019
January
)
The transmission of financial shocks and the gains from international macroprudential policy coordination are studied in a two-region, core-periphery model with a global bank, a two-level financial structure, and imperfect financial integration. The model replicates the stylized facts associated with global banking shocks, with respect to output, credit, house prices, and real exchange rate fluctuations in recipient countries, as documented empirically.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Report
The South East Asian Central Banks (SEACEN)
(
2019
December
)
SEG economies, as a group, remained a net capital exporter with higher current account surpluses and higher net international investment position. Net resident capital outflows were up, driven by higher resident direct and portfolio outflows notably from SEG Advanced Economies.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Macrofinancial stability measures
Capital flow management
Scope:
Southeast Asia
Technical Note
World Bank Group (WBG)
(
2019
April
)
The report discusses key policy issues that enable and constrain digital savings market development and offers policy considerations within the context of the G20’s High-Level Principles for Digital Financial Inclusion. Based on current market observations, three policy considerations seem most important for facilitating digital savings account deployments: Enable banking institutions to pursue digital savings partnerships with nonbank entities. Support the development of interoperability between banks and nonbank e-money issuers. Harmonize customer due diligence standards for e-money wallets and low-risk bank deposits.
Tags:
Financial inclusion
Ditigalization of finance, cybersecurity, and data privacy
Scope:
World
Working Paper
World Bank Group (WBG)
(
2019
April
)
Financial inclusion can help promote development. Inclusive financial systems allow people to invest in their education and health, save for retirement, capitalize on business opportunities, and confront shocks. In the Europe and Central Asia region, there is great variation in financial inclusion.
Tags:
Financial inclusion
Scope:
Central Asia
European Union
Economic Update
World Bank Group (WBG)
(
2019
April
)
With slowing global growth and increasing uncertainty clouding the global economic prospects, the Europe and Central Asia region faces a more challenging context than previously envisioned. Growth in the emerging markets and developing economies in the region slowed to 3.1 percent in 2018 and is projected to decline to 2.1 percent in 2019.
Tags:
Financial inclusion
Scope:
Central Asia
European Union
Policy Review
Japan Ministry of Finance (MOF)
(
2018
September
)
ASEAN economies have become more financially integrated over the past decade. Both de-facto integration and regional agreements under the ASEAN Economic Community (AEC) have resulted in increasing financial links among countries in the region. Regional initiatives in financial services liberalization, capital market development, and capital account liberalization have also been contributing to the deepening of regional financial markets.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
Southeast Asia
Publication
International Monetary Fund (IMF)
(
2018
September
)
In recent years much progress has been made in financial inclusion globally, including in Asia and the Pacific. Nevertheless, financial inclusion gaps remain large across and within countries. Close to half of the adult population in low- and middle-income Asia-Pacific economies does not have a bank account, and less than 10 percent has borrowed from formal financial institutions.
Tags:
Financial inclusion
Scope:
Asia
Policy Review
Japan Ministry of Finance (MOF)
(
2018
September
)
Looking back at Japanese banks’ activities in Asia since the 1980s, they have steadily expanded credit provision and other business operations amid the growing sophistication of needs while Euro-Area banks have restrained their activities in the region, particularly since the global economic and financial crisis in 2007-2008.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
Asia
Japan
Report
Asian Development Bank (ADB)
(
2018
October
)
The Asia and Pacific region maintains healthy economic growth outlook. Excluding high-income economies, the region will grow at 6.0% this year and 5.8% in 2019. However, risks remain tilted to the downside with international trade conflicts escalating and elevated debt levels exposing the region’s financial vulnerability as United States (US) monetary policy normalization continues.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
Asia
Working Paper
Asian Development Bank (ADB)
(
2018
October
)
It is widely believed that local currency bond markets (LCBMs) can promote financial stability in developing countries. For instance, they can help mitigate the currency and maturity mismatch that contributed to the outbreak of the Asian financial crisis of 1997-1998. This paper empirically tests such conventional wisdom on the stabilizing effect of LCBMs.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Scope:
World
Report
Monetary Authority of Singapore (MAS)
(
2018
November
)
The report “Cross-Border Interbank Payments and Settlements” is a cross-jurisdictional industry collaboration between Canada, Singapore and the United Kingdom to examine the existing challenges and frictions that arise when undertaking cross border payments. This report explores proposals for new and more efficient models for processing cross-border transactions.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Cross-border settlement infrastructure
Scope:
World
Working Paper
Central Bank of the Philippines (BSP)
(
2018
November
)
This study examines the different motives of central bank FX market intervention. Particular attention is given to the financial stability motive by considering periods of capital outflows and residents’ cross-border exposures.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Currency and foreign exchange market
Currency unions, intervention, and manipulation
Scope:
World
Report
Organisation for Economic Co-operations and Development (OECD)
(
2018
November
)
This annual OECD report provides a comprehensive and comparable picture of the use and functioning of public equity markets in Asia. The objective of the report is to inform policy discussions on how capital markets can serve their role to channel financial resources from households to productive investments in the real economy.
Tags:
Financial resilience and stability
Capital market
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2018
May
)
This paper examines the developments of cross-border portfolio assets and liabilities in the Asia and Pacific region over the periods of 2001-2017. Rapid increases in both portfolio foreign assets and liabilities have taken place particularly after the 2008-2009 global financial crisis.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
Asia
Policy Brief
World Bank Group (WBG)
(
2018
May
)
During the last two decades, economies in East Asia and Pacific have been integrating internationally through trade and financial investments. One trend is puzzling. Whereas most of the trade integration has been within the region, most of the financial integration has been with countries outside the region. However, a closer examination of investment types shows that the relative lack of regional financial connectivity occurs mostly in equity, bonds, and bank syndicated loans (in so-called arm’s-length investments). The region is much more connected through foreign direct investment (FDI) (through both mergers & acquisitions and greenfield investments).
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
East Asia
The Pacific
Periodical
Japan Research Institute (JRI)
(
2018
June
)
A growing number of fintech-related businesses are emerging in Southeast Asia, reflecting increased interest as part of the global fintech (financial technology) boom. The Internet and smartphones are spreading rapidly in Southeast Asia, and many of these new businesses are utilizing these technologies to find solutions to the region’s financial problems.
Tags:
Financial inclusion
Financial technology and innovation
Scope:
Southeast Asia
Report
The South East Asian Central Banks (SEACEN)
(
2018
June
)
Net capital outflows of SEG member economies amounted to around US$300 billion as of end 2017. Gross resident capital outflows (financial account assets) reached US$1,158 billion, while gross non-resident capital inflows (financial account liabilities) summed up to US$869 billion, bringing the net capital outflows to US$289 billion, excluding net errors and omissions.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Macrofinancial stability measures
Capital flow management
Scope:
Southeast Asia
Working Paper
Bank of International Settlements (BIS)
(
2018
July
)
This paper looks back at past episodes of financial stress in Asia with a forward-looking perspective. It puts ourselves in the shoes of a contemporary observer with the data at hand and ask what evidence was available on the systematic build-up of vulnerabilities. This paper reconstructs a graphical narrative of banking and financial developments at the time.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
Asia
Working Paper
Asian Development Bank (ADB)
(
2018
January
)
Gauging foreign (domestic) biases as the deviation of foreign (domestic) investors’ actual portfolio allocation of a bond market from the same bond market’s weight in global bond market, this paper investigates the determinants of foreign and domestic investment biases in 41 global bond markets. It finds that foreign investors significantly overweigh markets that offer better risk-return profiles.
Tags:
Regional financial cooperation and integration
Financial and capital market development
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2018
January
)
This paper seeks to draw lessons for developing countries based on a survey of the recent literature on financial globalization. First, while capital account openness holds promises (by potentially generating a lower cost of capital, better risk sharing, and stronger disciplines on policies), they do not always work out that way in the data. Distortions in the domestic financial market, international capital market, domestic labor market, and domestic public governance can all make financial globalization less beneficial for developing countries. Second, developing countries sometimes need to insulate themselves from foreign monetary policy shocks. The empirical pattern appears to be somewhere between a trilemma and a dilemma. While nominal exchange rate flexibility is insufficient for policy autonomy, capital flow management may be needed to confer more monetary policy autonomy.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
World
Report
The South East Asian Central Banks (SEACEN)
(
2018
December
)
Net resident capital outflows of SEG member economies amounted to US$96 billion as of mid-2018.2 Net acquisition of foreign assets by residents (financial account assets) reached US$690 billion, while net incurrence of liabilities to non-residents (financial account liabilities) summed up to US$594 billion, bringing the net resident capital outflows to around US$95 billion, excluding net errors and omissions.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Macrofinancial stability measures
Capital flow management
Scope:
Southeast Asia
Working Paper
Organisation for Economic Co-operations and Development (OECD)
(
2017
September
)
Micro, small and medium-sized enterprises (MSMEs) make up the majority of enterprises in the world, providing employment and contributing significantly to national incomes. They can therefore play an important role in sustainable, inclusive economic growth and development and improved financial stability given appropriate conditions and timely support.
Tags:
Financial inclusion
Financial inclusion for MSMEs
Financial literacy and education
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2017
May
)
This paper provides an overview of the operational implementation of negative interest rates in Europe and Japan. Drawing attention to the fact that there is precedent for negative policy rates and negative money market rates, the paper addresses conceptual issues and summarizes measures which define negative interest rate policy.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Scope:
European Union
Japan
Working Paper
International Monetary Fund (IMF)
(
2017
May
)
This paper documents the evolution of international financial integration since the global financial crisis using an updated dataset on external assets and liabilities, covering over 210 economies for the period 1970-2015.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Regional financial cooperation and integration
Financial integration implications
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2017
May
)
What is the role for supply and demand forces in determining movements in international banking flows? Answering this question is crucial for understanding the international transmission of financial shocks and formulating policy. This paper addresses the question by using the method developed in Amiti and Weinstein (forthcoming) to exactly decompose the growth in international bank credit into common shocks, idiosyncratic supply shocks and idiosyncratic demand shocks for the period 2000-2016.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
World
Working Paper
National Bureau of Economic Research (NBER)
(
2017
March
)
Shadow bank market share in residential mortgage origination nearly doubled from 2007-2015, with particularly dramatic growth among online “fintech” lenders. This paper studies how two forces, regulatory differences and technological advantages, contributed to this growth.
Tags:
Financial inclusion
Financial technology and innovation
Scope:
World
Report
Asian Development Bank (ADB)
(
2017
February
)
Asia and the Pacific is leading a recovery in world trade amid the continued uncertainty surrounding the global trade policy environment. In 2016, Asia’s trade (by volume) grew faster than global trade, but remained below its economic growth. Asia’s trade growth picked up to 1.7% in 2016 from 1.4% in 2015, while the world trade growth decelerated to 1.3% from 2.6%.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
Asia
Publication
Asian Development Bank (ADB)
(
2017
April
)
In his keynote address, Hyun-Song Shin discussed the central role dollar exchange rates play in setting financial conditions and real economic variables. He noted the challenge this poses for controlling monetary and financial conditions and ensuring economic stability in the region.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Scope:
Asia
Working Paper
International Monetary Fund (IMF)
(
2017
April
)
Access to financial services in the small states of the Pacific is being eroded. Weaknesses in Anti-Money Laundering and Combating the Financing of Terrorism compliance in the context of high levels of remittances are contributing to banks’ decisions to withdraw corresponding banking relationships and close bank accounts of money transfer operators. This paper gathers evidence on these developments in the small states of the Pacific, discuss the main drivers, and the potentially negative impact on the financial sector and macroeconomy.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
The Pacific
Report
International Monetary Fund (IMF)
(
2017
April
)
The April 2017 Global Financial Stability Report (GFSR) finds that financial stability has continued to improve since last October. Economic activity has gained momentum and longer-term interest rates have risen, helping to boost the earnings of banks and insurance companies. Despite these improvements, however, threats to financial stability are emerging from elevated political and policy uncertainty around the globe.
Tags:
Financial resilience and stability
Capital market
Scope:
World
Working Paper
National Bureau of Economic Research (NBER)
(
2017
April
)
When central banks adjust interest rates, the opportunity cost of lending in local currency changes, but - in absence of frictions - there is no spillover effect to lending in other currencies. However, when equity capital is limited, global banks must benchmark domestic and foreign lending opportunities. This paper shows that, in equilibrium, the marginal return on foreign lending is affected by the interest rate differential, with lower domestic rates leading to an increase in local lending, at the expense of a reduction in foreign lending.
Tags:
Macrofinancial stability measures
Capital flow management
Scope:
World
Working Paper
National Bureau of Economic Research (NBER)
(
2017
April
)
This paper documents a new international stylized fact describing the relationship between real exchange rates and external asset holdings. Economists have long argued that the real exchange rate is associated with the net international investment position, appreciating as external wealth increases. This mechanism has been seen as central for international payments equilibrium and relative price adjustments. However, it argues that the effect of external assets held by the public sector - reserve accumulation - on real exchange rates may be quite different from that of privately held external assets, and that capital controls are a critical factor behind this difference.
Tags:
Macrofinancial stability measures
Capital flow management
Scope:
World
Policy Paper
International Monetary Fund (IMF)
(
2017
April
)
Correspondent banking relationships (CBRs), which facilitate global trade and economic activity, have been under pressure in several countries. So far, cross-border payments have remained stable and economic activity has been largely unaffected, despite a recent slight decrease in the number of CBRs. However, in a limited number of countries, financial fragilities have been accentuated as their cross-border flows are concentrated through fewer CBRs or maintained through alternative arrangements. These fragilities could undermine affected countries’ long-run growth and financial inclusion prospects by increasing costs of financial services and negatively affecting bank ratings.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
World
Policy Brief
Consultative Group to Assist the Poor (CGAP)
(
2016
October
)
The rapid scaling of digital stored-value products coincides with a sustained interest (initially triggered by the 2008 global financial crisis) in establishing or strengthening deposit insurance systems, and with emerging frameworks that extend deposit insurance coverage to financial products with characteristics similar to deposits in multiple countries.
Tags:
Financial inclusion
Ditigalization of finance, cybersecurity, and data privacy
Scope:
World
Working Paper
Organisation for Economic Co-operations and Development (OECD)
(
2016
November
)
Certain growth-promoting policies can have negative side-effects by increasing the vulnerability of economies to financial crises. Typical examples are greater openness to financial flows or more liberalised financial markets. This paper investigates whether the growth benefits of policy reforms in these growth enhancing areas, and others such as trade openness, exceed the possible costs of occasional, albeit potentially severe, crises for a sample of 100 developed and emerging economies from 1970 to 2010.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
World
Working Paper
Asian Development Bank (ADB)
(
2016
June
)
Contingent claims analysis applied to Indonesia, Malaysia, the Philippines, the Republic of Korea, and Thailand shows no particular vulnerability to sovereign debt distress during recent years. However, the highly volatile “distance to distress” measure suggests that any of these countries may fall victim to a sudden loss in market confidence.
Tags:
Financial resilience and stability
Capital market
Public and private sector debt and leverage
Scope:
Indonesia
Malaysia
Philippines
Republic of Korea
Thailand
Working Paper
Organisation for Economic Co-operations and Development (OECD)
(
2016
January
)
A number of factors and trends have driven the development of financial education policies in Asia and the Pacific in recent years. In some countries and economies, the development of financial education policies has been mostly spurred by high levels of financial exclusion, both among households and small businesses, in a context of low financial literacy, low general education and high poverty. In others, current or anticipated population ageing is also playing an important role. Various countries and economies in the region have engaged in the development of financial education and financial consumer protection policy responses to help address these issues.
Tags:
Financial inclusion
Financial literacy and education
Scope:
Asia
Report
Asian Development Bank (ADB)
(
2016
February
)
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
Asia
Policy Paper
Organisation for Economic Co-operations and Development (OECD)
(
2016
December
)
Considering the deep and long-lasting impact of severe recessions, such as the 2008-09 financial crisis, it is important that measures be taken to minimise the risk of such event. But in doing so the benefits need to be balanced against the potential costs in terms of lower average growth that some of the actions to lower vulnerabilities to bad events could entail. Insofar as the risk-mitigating measures can involve a trade-off between growth and crisis risk, the most cost-effective actions need to be identified, spanning both macro and structural policies.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2015
September
)
Given the heavy reliance on bank lending as the main source of financing in most Asian economies, banks could potentially play a pivotal role in monetary policy transmission. However, this paper finds that Asia’s bank lending channel or, more broadly, credit channel of domestic monetary policy is not very strong at the aggregate level. Using bank-level data for nine Asian economies during 2000-2013, it shows that heterogeneity of bank characteristics (e.g., ownership type, financial position), degree of foreign bank penetration of the domestic banking sector, and global financial conditions all have a bearing on the response of domestic credit to changes in domestic monetary policy, and may account for the apparently weak credit channel at aggregate level.
Tags:
Financial resilience and stability
Risks arising from non-financial stressors
Macrofinancial stability measures
Macroprudential policy coordination
Regional financial cooperation and integration
Financial integration implications
Scope:
Asia
Working Paper
International Monetary Fund (IMF)
(
2015
September
)
This paper analyzes the transmission of global liquidity to the ASEAN-5 countries (ASEAN-5), including the impact on financial landscapes and risks to financial stability. It finds that global liquidity transmission and changing financial landscapes have contributed to increases in risks to financial stability in ASEAN-5. Therefore, policymakers in ASEAN-5 should prepare for possible liquidity tightening, strengthen regulation of nonbanks, and establish a comprehensive financial stability framework. A number of countries are well-advanced in this process.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Scope:
Southeast Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2015
May
)
Following the 1997-1998 Asian financial crisis, financial authorities in ASEAN+3 embarked on several new initiatives for East Asia’s financial cooperation, including: (i) regional economic surveillance led by the Economic Review and Policy Dialogue (ERPD); (ii) a regional liquidity support facility, called the Chiang Mai Initiative (CMI); and (iii) local currency bond market development. The global financial crisis of 2007-2009 demonstrated the need to further strengthen East Asian financial cooperation.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Asia
Publication
Asian Development Bank (ADB)
(
2015
May
)
The growth of financial markets has clearly outpaced the development of financial market regulations. With growing complexity in the world of finance and the resultant higher frequency of financial crises, all eyes have shifted toward the current inadequacy of financial regulation. With financial innovation and securitization becoming more popular, interconnectedness in the financial system is at its height, both for intra- and extra-sovereign jurisdictions.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Financial resilience and stability
Capital market
Capital flow stability and volatility
Macrofinancial stability measures
Capital flow management
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Asia
Policy Review
World Bank Group (WBG)
(
2015
May
)
A country’s financial sector plays a critical role in economic development. Research confirms that countries with more developed financial sectors tend to enjoy a sustained period of growth. Financial sector development is not simply a result of economic growth; it is also the driver for growth (Levine, Loayza and Beck 2000).
Tags:
Regional financial cooperation and integration
Financial and capital market development
Scope:
Asia
Working Paper
International Monetary Fund (IMF)
(
2015
May
)
Consumer protection and financial literacy are essential pillars of a well functioning and stable financial system. As the global financial crisis demonstrated, inadequate attention to consumer protection and financial literacy can lead to financial instability. Though Shari’ah principles provide a strong foundation for consumer protection, the principles alone cannot provide adequate protection because not all providers are guided by ethical precepts and the practices have deviated from the principles. To safeguard the stability of the Islamic finance industry, consumer protection frameworks that cater to the specifics of Islamic financial products should be an integral part of regulatory frameworks.
Tags:
Financial inclusion
Financial literacy and education
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2015
March
)
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. It analyzes the costs and benefits for both adjustment options in each area, i.e., capital account restrictions and exchange rate regime.
Tags:
Macrofinancial stability measures
Capital flow management
Scope:
East Asia
Working Paper
Asian Development Bank (ADB)
(
2015
March
)
Meeting the financing requirements of the post-2015 development agenda presents significant challenges in light of unfulfilled Millennium Development Goals (MDG) targets and the likely increased development targets post 2015. With weak fiscal balances even in middle income Asian economies, it is necessary to promote efficient allocation of resources and enhance availability of financial instruments to catalyze commercial financing to meet development goals and complement fiscal resources.
Tags:
Financial inclusion
Agricultural financing
Financial inclusion for MSMEs
Macrofinancial stability measures
Sustainable finance measures
Disaster risk financing
Sustainable finance concerning social and governance
Regional financial cooperation and integration
Bilateral and multilateral development finance
Financial and capital market development
Scope:
Asia
Working Paper
Peterson Institute for International Economics (IIE)
(
2015
March
)
Developing Asia has exhibited rapid growth while saddled with relatively backward financial systems. One might conclude that the coexistence of sustained rapid growth and financial underdevelopment in developing Asia implies that an efficient financial sector is not indispensable for economic development. A more considered view would be that developing Asia grew rapidly despite, not because of, financial underdevelopment.
Tags:
Regional financial cooperation and integration
Financial and capital market development
Financial cooperation agreements and reforms
Scope:
Asia
Working Paper
Peterson Institute for International Economics (IIE)
(
2015
March
)
Growth in developing Asia will need to rely more on improvements in productivity growth and less on capital deepening. Although there is no single reform path to spur productivity growth, financial system deepening is central to a more efficient allocation of capital across sectors and can facilitate innovation and technology transfer. But malfunctioning financial systems can also result in the misallocation of resources, making it important that policymakers focus less on increasing the size of the financial sector and more on improving its intermediation function.
Tags:
Regional financial cooperation and integration
Financial and capital market development
Scope:
Asia
Working Paper
Peterson Institute for International Economics (IIE)
(
2015
March
)
The financial sectors in Asian emerging-market economies are now relatively unlikely to provoke new financial crises, either because of reforms after the East Asian financial crisis in the later 1990s or because of the dominance of state-owned banks not subject to bank runs. Financial intermediation is surprisingly high and is consistent with higher rates of saving and investment and hence growth in the main economies of the region (as compared to, say, counterparts in Latin America).
Tags:
Regional financial cooperation and integration
Financial and capital market development
Scope:
Asia
Working Paper
South East Asian Central Banks (SEACEN)
(
2015
June
)
Central banks have increasingly been given explicit financial stability mandates and as a result, macroprudential policies have become the buzz word in central bank and regulatory circles as well as in international financial institutions like the IMF and BIS. While macroprudential policies are a useful addition to the toolbox, there are various challenges that central banks and regulatory authorities would need to meet to obtain the intended outcomes.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Report
Bank for International Settlements (BIS)
(
2015
June
)
Global cross-border claims increased by $11.6 billion between end September and end-December 2014 on an exchange rate-adjusted basis. Cross-border claims grew at a year-on-year rate of 5%, with lending to non-bank borrowers expanding faster (7%) than claims on banks (3%).
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2015
July
)
The Global Integrated Monetary and Fiscal model (GIMF) is a multi-region DSGE model developed by the Economic Modeling Division of the IMF for policy and scenario analysis. This paper compares two versions of GIMF, GIMF with a conventional financial accelerator, where bank balance sheets do not play a prominent role, and GIMF with both a financial accelerator and a fully specified banking sector that can make lending losses, and that is regulated according to Basel-III. This paper illustrates the comparative macroeconomic properties of both models by presenting their responses to a wide range of fiscal, demand, supply and financial shocks.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Scope:
World
Working Paper
Asian Development Bank (ADB)
(
2015
July
)
Recent key challenges highlight the need to revisit Asia’s financial development. These include the region’s growth slowdown since the global crisis, compounded by a less benign external environment; internal structural challenges, such as population aging; and the maturing of much of the region into middle-income status.
Tags:
Regional financial cooperation and integration
Financial and capital market development
Scope:
Asia
Working Paper
Asian Development Bank (ADB)
(
2015
July
)
This paper constructs an index of financial development for 23 Asian economies based on subindices of access, depth, and efficiency of financial institutions and markets and find evidence that economies with weaker financial systems are catching up to the Asian benchmark economies, namely Hong Kong, China; Japan; the Republic of Korea; and Singapore.
Tags:
Regional financial cooperation and integration
Financial and capital market development
Scope:
Asia
Working Paper
International Monetary Fund (IMF)
(
2015
February
)
The establishment of the ASEAN Economic Community (AEC) at end-2015 has brought into sharp focus the issue of financial and economic integration in the region. This paper takes stock of ASEAN’s financial integration and prospects. ASEAN integration could accelerate in the years ahead; it will likely be a safe, gradual process consistent with the “ASEAN way” of consensus decision-making.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Financial integration implications
Scope:
Southeast Asia
Report
Asian Development Bank (ADB)
(
2015
February
)
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
Asia
Working Paper
International Monetary Fund (IMF)
(
2015
February
)
This paper presents an overview of exposures in the balance sheets of central banks, banks, and other depository institutions during the past decade, with emphasis on asset growth and currency composition.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Implications, lessons learned, and ways forward from financial crises
Scope:
World
Journal
Economic Research Institute for ASEAN and East Asia (ERIA)
(
2015
February
)
Nothing could perhaps be as fitting and timely during this early part of 2015 than to review the historical development of East Asian economic integration in our final countdown to the establishment of the ASEAN Economic Community (AEC) at the latter part of this year.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
East Asia
Working Paper
Asian Development Bank (ADB)
(
2015
August
)
This paper uses directed bilateral flow data on multiple dimensions of economic integration to construct a composite index of regional integration outcomes covering 19 regions in various parts of the world. As a first step, the multidimensional indicator is used to rank regions according to their current degree of regional integration, which allows for a direct comparison of Asia’s regional integration performance with those of other regions of the world. As a second step, the constructed indicator of regional integration outcomes is used as the output variable in a data envelopment analysis (DEA) to estimate Asia’s untapped regional integration potential.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
Asia
Publication
Asian Development Bank (ADB)
(
2015
August
)
This report reviews the foreign exchange (FX) and FX hedging markets in ASEAN+3 as they relate to cross-border investments in local currency bonds, and makes recommendations to facilitate the development of the markets and FX risk management.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Foreign exchange market development
Scope:
Southeast Asia
Working Paper
Asian Development Bank (ADB)
(
2015
August
)
This paper examines the evolution of intra-East Asian financial integration from 2001 to 2013. Most existing studies on this topic look primarily at asset holdings; it examines liability holdings as well. Using the International Monetary Fund’s Coordinated Portfolio Investment Survey data for equities, long-term debt, and short-term debt, the analysis generally supports the conventional wisdom that East Asian countries are more financially integrated with global financial centers than they are with each other.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
East Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2015
August
)
This paper estimated the effect of the share of mortgage lending by individual banks (together with some control variables) on two measures of financial stability - the bank Z-score and the nonperforming loan ratio - for a sample of 212 banks in 19 emerging Asian economies for 2007-2013 from the Bankscope database.
Tags:
Financial resilience and stability
Capital market
Public and private sector debt and leverage
Scope:
Asia
Book
International Monetary Fund (IMF)
(
2015
August
)
Asia’s financial systems proved resilient to the shocks from the global financial crisis, and growth since then has been strong. But new challenges have emerged in the region’s economies, including demographics and aging, the need to diversify from bank-dominated systems, urbanization and infrastructure, and the rebalancing of economic activity. This book takes stock of the challenges facing the region today and how economic systems in Asia’s advanced and emerging market economies compare with the rest of the world.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Financial resilience and stability
Risks arising from non-financial stressors
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Asia
Working Paper
International Monetary Fund (IMF)
(
2015
April
)
This paper studies the impact of the US quantitative easing (QE) on both the emerging and advanced economies, estimating a global vector error-correction model (GVECM) and conducting counterfactual analyses. It focuses on the effects of reductions in the US term and corporate spreads.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2015
April
)
The 14 Pacific developing member countries (DMCs) of the Asian Development Bank (ADB) have opted for very different exchange rate regimes with varying degrees of flexibility. Whereas several microstates have adopted an external currency as their legal tender, others have decided to use a basket currency and yet others have chosen a managed float. The choice of exchange rate regime can have far reaching economic consequences.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
The Pacific
Publication
Asian Development Bank (ADB)
(
2015
April
)
2015 is a milestone year. The global community has arrived at a moment of understanding that current patterns of development, while delivering immense benefits to some countries and people, have left others far behind. The many returns from growth have also pushed against planetary boundaries. In the Asia and Pacific region, a phenomenal reduction in poverty has tailed high economic growth rates, yet patterns of consumption and production are increasingly skewed. Climate change - the result of deepening imbalances - is adding severe pressures likely to intensify over time.
Tags:
Macrofinancial stability measures
Sustainable finance measures
Green finance
Regional financial cooperation and integration
Bilateral and multilateral development finance
Scope:
Asia
Publication
The South East Asian Central Banks (SEACEN)
(
2014
September
)
Financial Market Infrastructures (FMIs) play a critical role in the financial system and the broader economy by facilitating the clearing, settlement and recording of monetary and other financial transactions and thereby maintaining and promoting financial stability and economic growth. However, the trends of financial sector development and interdependence of FMIs affect the assessment and management of payment and settlement risk for FMIs. It is thus important to know the status of FMIs in member economies as well as the trend and observations of their interdependence.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Cross-border settlement infrastructure
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2014
September
)
This paper examines bank credit growth in emerging markets before, during, and after the 2008-09 financial crisis using bank-level data, focusing on the role of bank ownership.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Financial resilience and stability
Capital market
Public and private sector debt and leverage
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2014
September
)
Output growth has slowed in several emerging markets since 2011 - a remarkable feature for a non-crisis period in EMs. Such synchronized slowdowns were largely unanticipated by scholars and forecasters alike. This paper attempts to shed light on the main drivers of growth surprises and synchronized slowdowns in emerging markets post-global financial crisis. It finds that lower trading partner demand was a key external factor in explaining these events during 2011-13, and that changes in external financing conditions have yet to play a role in EMs’ growth.
Tags:
Financial resilience and stability
Risks arising from non-financial stressors
Financial stress in developing and emerging markets
Scope:
World
Report
Bank for International Settlements (BIS)
(
2014
September
)
Following a prolonged period of unusual tranquility, volatility in financial markets ticked upwards in early August. Risk appetite took a dent, as escalating geopolitical tensions added to renewed concerns about the recovery. Equity prices fell, especially in Europe, high-yield credit spreads widened significantly, and yields of safe haven assets such as short-maturity German bunds fell into negative territory. But markets quickly rode out the turbulence. By early September, they had already recovered their losses, as worries over geopolitical tensions gave way to investors’ anticipation of further monetary stimulus in the euro area.
Tags:
Regional financial cooperation and integration
Financial and capital market development
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2014
September
)
EM Asia has seen a transformation of its monetary policy environment over the past 2 decades. By far, the most relevant change has been the maturing of its financial systems and the growing relevance of the global financial cycle: financial inclusion has spread, financial markets have deepened and financial globalization has linked domestic markets closer to international markets.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Macrofinancial stability measures
Macroprudential policy coordination
Regional financial cooperation and integration
Financial and capital market development
Scope:
Asia
Discussion Paper
Bank of Japan (BoJ)
(
2014
September
)
Quantitative monetary policy at the zero interest bound should be understood as a “bond market carry trade.” Net interest earnings on the front end of the monetary carry trade should be retained - to guard against the central bank having to create reserves (or borrow) to pay interest on reserves or managed liabilities on the back end, and to show that interest expenses are paid for in large part by earnings from the front end.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2014
September
)
Despite revisions to bank capital standards, fundamental shortcomings remain: the rules for setting capital requirements need to be simpler, and resolution should be an essential part of the capital requirement framework.
Tags:
Macrofinancial stability measures
Capital flow management
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2014
September
)
This paper estimates the response of Asian stock market prices to exogenous monetary policy shocks using a vector error correction model. In this paper, monetary policy transmits to stock market price through three routes: money by itself, exchange rate, and inflation. The result points to the fact that stock prices increase persistently in response to an exogenous easing monetary policy.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
Asia
Working Paper
Bank for International Settlements (BIS)
(
2014
September
)
This paper extends the model of Aoki et al. (2009) considering a two sector small open economy. It studies the interaction of borrowing, asset prices, and spillovers between tradable and non-tradable sectors. The results suggest that when it is difficult to enforce debtors to repay their debt unless it is secured by collateral, a productivity shock in the tradable sector generates an increase in asset prices and leverage that spills over to the non-tradable sector, generating an appreciation of the real exchange and an increase in domestic lending.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Financial resilience and stability
Capital market
Public and private sector debt and leverage
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2014
September
)
International banks greatly reduced their direct cross-border and local affiliates’ lending as the global financial crisis strained balance sheets, lowered borrower demand, and changed government policies. Using bilateral, lender-borrower country data and controlling for credit demand, this paper shows that reductions largely varied in line with markets’ prior assessments of banks’ vulnerabilities, with banks’ financial statement variables and lender-borrower country characteristics playing minor roles. It finds evidence that moving resources within banking groups became more restricted as drivers of reductions in direct cross-border loans differ from those for local affiliates’ lending, especially for impaired banking systems. Home bias induced by government interventions, however, affected both equally.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2014
October
)
This paper analyzes the turnover of fixed income derivatives in seven currencies to test the hypothesis that market participants increasingly use contracts based on private rather than government rates to hedge and to take positions.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Macrofinancial stability measures
Capital flow management
Scope:
World
Working Paper
World Bank Group (WBG)
(
2014
October
)
This paper investigates the effect that tight credit conditions had on outward foreign direct investment flows during the 2008-2010 global financial crisis. A difference-in-differences approach is used to isolate a “credit channel” impact of the global financial crisis on foreign direct investment. The global financial crisis had a stronger negative impact on the relative volume of outward foreign direct investment in financially vulnerable sectors in more financially developed countries, especially if these countries also experienced a banking crisis.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2014
October
)
This paper discusses desirable exchange rate regimes and how countries can shift from their current regimes to these regimes over the medium term. It demonstrates the superiority of a basket-peg regime with the basket weight rule over a floating regime with the interest rate rule or the money supply rule in small open economies, during periods when volatility of exchange rates is moderate. Countries which currently have fixed exchange rates would be better moving toward either a basket-peg or a floating regime over the medium term. A shift to a basket-peg regime is preferred when exchange rate fluctuations are large.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
Asia
Working Paper
Bank of Korea (BOK)
(
2014
October
)
This paper proposes network entropy as a tool for measuring diversity of highly connected financial networks. The computation of network entropy hinges on eigenvector centrality and Shannon entropy.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2014
October
)
The paper examines the composition and drivers of cross-border bank lending between 1995 and 2012, distinguishing between syndicated and non-syndicated loans. It shows that on-balance sheet syndicated loan exposures account for almost one third of total cross-border loan exposures during this period. Furthermore, syndicated loan exposures increased during the global financial crisis due to large drawdowns on credit lines extended before the crisis.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2014
October
)
This paper assesses empirically the key drivers of private capital flows to a large sample of emerging market economies in the last decade. It analyzes the effect of the global financial cycle, measured by the VIX, on capital flows and investigates the role of fundamentals and country characteristics in mitigating or amplifying its effect.
Tags:
Macrofinancial stability measures
Capital flow management
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2014
October
)
This paper argues that sovereigns can reduce the likelihood of debt crises through debt management: for any given financing need arising from the budget, they can adjust the timing and size of market recourse in response to borrowing costs. It models debt management by letting the sovereign adopt a funding rule that can respond to interest rates, and characterize the optimal rule accounting for the sovereign’s large-agent status. It then decomposes default risk into a solvency component driven by fundamentals and a coordination component driven by self-fulfilling expectations, and uses numerical exercises to show that debt management operates on both.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2014
October
)
This paper uses a cross-country panel framework to analyze the effect of net official flows (chiefly foreign exchange intervention) on current accounts. It finds that net official flows have a large but plausible effect on current account balances. The estimated effects are larger with instrumental variables (42 cents to the dollar on average compared to 24 without instruments), reflecting a possible downward bias in regressions without instruments owing to an endogenous response of net official flows to private financial flows.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Macrofinancial stability measures
Capital flow management
Scope:
World
Working Paper
Peterson Institute for International Economics (IIE)
(
2014
October
)
This paper applies the probabilistic debt sustainability model developed for the euro area in Cline (2012, 2014) to sovereign debt in the United States and Japan. The results indicate that to avoid further increases in the expected ratio of public debt to GDP over the next decade, average annual primary deficits will need to be reduced by about 0.75 percent of GDP in the United States and by about 3 percent of GDP in Japan from the likely baselines as of mid-2014.
Tags:
Financial resilience and stability
Capital market
Public and private sector debt and leverage
Scope:
Japan
United States
Working Paper
World Bank Group (WBG)
(
2014
October
)
This paper examines how financial development influences foreign direct investment. The direct and indirect sector specific effects that source countries’ financial development and destination countries’ financial development can have on foreign direct investment are first identified in a conceptual framework.
Tags:
Regional financial cooperation and integration
Financial and capital market development
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2014
October
)
Although cross-border bank lending has fallen sharply since the crisis, extending our bank ownership database from 1995-2009 up to 2013 shows only limited retrenchment in foreign bank presence. While banks from OECD countries reduced their foreign presence (but still represent 89% of foreign bank assets), those from emerging markets and developing countries expanded abroad and doubled their presence.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2014
November
)
In Asia, small and medium-sized enterprises (SMEs) account for a major share of employment and dominate the economy. Asian economies are often characterized as having bank-dominated financial systems and underdeveloped capital markets, in particular venture capital markets. Hence, looking for new methods of financing for SMEs is crucial.
Tags:
Financial inclusion
Financial inclusion for MSMEs
Scope:
Asia
Discussion Paper
International Monetary Fund (IMF)
(
2014
May
)
Large banks have grown significantly in size and become more involved in market-based activities (those outside traditional bank lending) since the late 1990s. The advance of information technology and deregulation, which has led to a proliferation of financial markets, may have been the key driver of this process.
Tags:
Regional financial cooperation and integration
Financial and capital market development
Scope:
World
Working Paper
Asian Development Bank (ADB)
(
2014
May
)
This paper examines the issues surrounding the implementation of global regulatory reforms - spearheaded by the G20 and mainly under the aegis of the Financial Stability Board (FSB) - in Brunei Darussalam, Cambodia, the Lao People’s Democratic Republic (Lao PDR), Myanmar, and Viet Nam (BCLMV).
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Brunei Darussalam
Cambodia
Lao People's Democratic Republic
Myanmar
Viet Nam
Policy Brief
Peterson Institute for International Economics (PIIE)
(
2014
May
)
The prospect of a global renminbi (RMB) that could challenge the position of the dollar or the euro as a reserve currency has generated debate and captured the imagination of academics, pundits, and policymakers in recent years. Chinese officials embrace the limited goal of increasing usage of the RMB in international transactions without publicly advocating full reserve-currency status and free convertibility that such a status would require.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Currency unions, intervention, and manipulation
Scope:
China, People's Republic of
Working Paper
Asian Development Bank Institute (ADBI)
(
2014
May
)
This paper tries to address the question of what could help make the renminbi a reserve currency. In recent years, the authorities in the People’s Republic of China (PRC) have made efforts to internationalize its currency through a two-track strategy: promotion of the use of the renminbi in the settlement of cross-border trade and investment, and liberalization of the capital account.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Currency unions, intervention, and manipulation
Scope:
China, People's Republic of
Working Paper
Asian Development Bank Institute (ADBI)
(
2014
May
)
Despite the increasing recognition that the renminbi (RMB) may eventually become a key global currency, several important questions remain to be answered. This paper analyzes the benefits and costs of the RMB becoming an international currency.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Currency unions, intervention, and manipulation
Scope:
China, People's Republic of
Working Paper
Bank for International Settlements (BIS)
(
2014
May
)
Monetary policies pursued in response to the financial crisis have shown that changes in central bank balance sheets have major macroeconomic consequences. The New Classical Macroeconomics, which gained increasing sway from the late-1980s, had led to an exclusive focus on the policy rate and a neglect of balance sheet effects.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2014
May
)
With the rise of the People’s Republic of China (PRC) as the world’s largest trading nation (measured by trade value) and second largest economic power (measured by GDP), its economic influence over the neighboring emerging economies in East Asia has also risen. The PRC introduced some exchange rate flexibility in July 2005, and in the wake of the global financial crisis has been pursuing a policy to internationalize its currency, the renminbi (RMB).
Tags:
Financial resilience and stability
Currency and foreign exchange market
Currency unions, intervention, and manipulation
Foreign exchange market development
Scope:
China, People's Republic of
East Asia
Working Paper
Bank for International Settlements (BIS)
(
2014
March
)
Large-scale forex intervention in emerging market economies (EMEs) aimed at resisting currency appreciation has major implications for the composition of banking system balance sheets. The domestic monetary consequences depend on the nature of central bank liabilities that are the counterpart of forex reserves.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2014
March
)
This paper evaluates the prospects for the renminbi’s role as an international currency and the implications for global financial markets. Although the People’s Republic of China (PRC) does not have either an open capital account or a flexible exchange rate, the renminbi has attained considerable traction as an international currency on account of the PRC’s rising shares of global trade and gross domestic product.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Currency unions, intervention, and manipulation
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2014
March
)
The People’s Bank of China and the Bank for International Settlements co-hosted a research conference on “Globalisation and Inflation Dynamics in Asia and the Pacific” on 23-24 September 2013 in Beijing. This was the wrap-up conference for the BIS Asian Office’s two-year research programme on globalisation and inflation that was launched by the Asian Consultative Council in February 2012. The event brought together senior officials and researchers from central banks, international organisations and academia.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Regional financial cooperation and integration
Financial integration implications
Scope:
Asia
Policy Review
Ministry of Finance (MOF) Japan
(
2014
March
)
The purpose of this paper is to examine what forms of monetary and financial cooperation will be desirable in East Asia with a focus on the spillover effects of currency misalignment on the Japanese economy in particular, thereby obtaining implications for monetary and financial cooperation in which Japan should engage in the region in the future.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
East Asia
Working Paper
World Bank Group (WBG)
(
2014
March
)
This paper examines gross financial inflows to developing countries between 2000 and 2013, with a particular focus on the potential effects of quantitative easing policies in the United States and other high-income countries. The paper finds evidence for potential transmission of quantitative easing along observable liquidity, portfolio balancing, and confidence channels.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Working Paper
South East Asian Central Banks (SEACEN)
(
2014
June
)
With revolutionary changes of the financial environment, due in particular to the progress of information and communication technology and the aftermath of the global financial crisis, central banks are facing new challenges in the pursuit of price, financial and exchange rate stability. This research paper looks at how central banks can enhance the effectiveness of monetary policy when in practice, the policy tools available to them are rather limited. In fact, many of them have no better option but short-term interest rates.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Policy Brief
Peterson Institute for International Economics (PIIE)
(
2014
June
)
For the major advanced economies and the world as a whole, insufficient aggregate demand - that is, too little spending - impeded recovery from the Great Recession of 2008-09. By manipulating their currencies to boost their net exports, many countries made a bad situation worse for their trading partners, which saw demand shifted away. The world needs policies that increase total demand rather than policies that fight over the allocation of the existing amount of demand.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Currency unions, intervention, and manipulation
Scope:
Hong Kong, China
Singapore
Switzerland
Publication
Asian Development Bank (ADB)
(
2014
June
)
The ASEAN Corporate Governance Scorecard was introduced in 2011. The scorecard is a corporate governance initiative of the Association of Southeast Asian Nations (ASEAN), under the ASEAN Capital Markets Forum (ACMF) Implementation Plan for the development of an integrated capital market, to complement other ACMF initiatives and promote ASEAN as an asset class. The scorecard hopes to raise corporate governance standards of publicly listed companies (PLCs) in ASEAN countries and increase their visibility to investors.
Tags:
Regional financial cooperation and integration
Financial and capital market development
Scope:
Southeast Asia
Working Paper
World Bank Group (WBG)
(
2014
June
)
This paper distinguishes among various types of capital and examines their effect on system-wide fragility. The analysis finds that higher quality forms of capital reduce the systemic risk contribution of banks, whereas lower quality forms can have a destabilizing impact, particularly during crisis periods. The impact of capital on systemic risk is less pronounced for smaller banks, for banks located in countries with more generous safety nets, and in countries with institutions that allow for better public and private monitoring of financial institutions.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2014
June
)
This paper employs a threshold vector autoregression (TVAR) methodology in order to examine the nonlinear nature of the interactions among credit market conditions, monetary policy, and economic activity. It departs from the existing literature on the subject along two dimensions.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2014
June
)
This paper examines how monetary policy should respond to nominal exchange rates in a New Keynesian open economy model that allows for a non-trivial role for sterilised intervention. The paper develops the argument against the backdrop of the evolving policy-making environment of Asian economies. Sterilised intervention can be a potent tool that offers policymakers an additional degree of freedom in maximising global welfare.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Publication
Asia-Pacific Economic Cooperation (APEC)
(
2014
July
)
The Asia Region Funds Passport (ARFP) is an initiative of the APEC Finance Ministers’ Process. The ARFP is a proposal for a multilaterally agreed framework allowing cross-border offers of eligible collective investment schemes (CIS) in ARFP member economies. Membership in the ARFP would be open to all APEC economies in the Asia region that meet certain criteria and at the discretion of individual economies.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2014
July
)
Developing economies are seeking to promote financial inclusion, i.e., greater access to financial services for low-income households and firms, as part of their overall strategies for economic and financial development. This raises the question of whether financial stability and financial inclusion are, broadly speaking, substitutes or complements. In other words, does the move toward greater financial inclusion tend to increase or decrease financial stability?
Tags:
Financial inclusion
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2014
July
)
There is a role for Asia’s financial sector to play to address the challenges associated with the region’s changing demographics and infrastructure investment needs. Enhancing financial innovation and integration in the region could facilitate intra-regional financial flows and mobilize resources from the aging savers in industrialized Asia to finance infrastructure investment in emerging Asia.
Tags:
Regional financial cooperation and integration
Financial and capital market development
Scope:
Asia
Working Paper
World Bank Group (WBG)
(
2014
July
)
Deeper regional integration can be beneficial especially for regions along international borders. It can open up new markets on opposite sides of borders and give consumers wider access to cheaper goods. This paper uses data from five contiguous districts of India, Nepal, and Bangladesh in the northeast of the subcontinent to measure the degrees of trade complementarity between districts.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
South Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2014
July
)
Multilateral development finance is at a critical juncture. In the past 70 years, it has developed through four distinct stages. The Bretton Woods conference established the World Bank and the International Monetary Fund in 1944 to finance post-war reconstruction and stabilize the global economy. The second stage saw the establishment of regional development banks in the 1950s and 1960s. This was followed by the emergence of subregional banks. In the fourth stage, from the mid-1970s to the 2000s, specialized vertical funds were established to address global issues, and private development finance expanded.
Tags:
Regional financial cooperation and integration
Bilateral and multilateral development finance
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2014
July
)
There is much speculation regarding a “race for dominance” among financial centers in Asia, arising from the anticipated financial opening up of the People's Republic of China. This frame of reference is, to an extent, a predilection that results from a traditional understanding of financial centers as possessing historical, geographic, and scale economy advantages. This paper, however, suggests that there is an alternative prism through which the evolution of financial centers in Asia needs to be viewed.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
Hong Kong, China
Singapore
Working Paper
Asian Development Bank (ADB)
(
2014
January
)
Debate continues over whether a monetary or currency union will be a viable alternative to the current exchange arrangements in East Asia. This paper adds to the literature by assessing the level of business cycle synchronization among 10 major East Asian economies which is considered a key precondition for a regional currency union.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Currency unions, intervention, and manipulation
Scope:
East Asia
Working Paper
Asian Development Bank (ADB)
(
2014
January
)
Asia’s bank-centered financial systems require the reduced supply-demand gap in lending as a core policy pillar to improve small and medium-sized enterprise (SME) access to finance. Meanwhile, the diversification of financing modalities beyond conventional bank lending is another key policy pillar to better serve various financing needs of SMEs and expand their financial accessibility.
Tags:
Financial inclusion
Financial inclusion for MSMEs
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2014
January
)
This paper presents a theoretical framework for policy making based on the “impossible trinity” or the “trilemma” hypothesis. A simple optimization model shows that placing more weight in terms of preference for each of the three open macroeconomic policies - exchange rate stability, financial market openness, and monetary policy independence - contributes to a higher level of achievement in that particular policy.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2014
January
)
This paper examines the effectiveness of capital outflow restrictions in a sample of 37 emerging market economies during the period 1995-2010, using a panel vector autoregression approach with interaction terms. Specifically, it examines whether a tightening of outflow restrictions helps reduce net capital outflows. It finds that such tightening is effective if it is supported by strong macroeconomic fundamentals or good institutions, or if existing restrictions are already fairly comprehensive. When none of these three conditions is fulfilled, a tightening of restrictions fails to reduce net outflows as it provokes a sizeable decline in gross inflows, mainly driven by foreign investors.
Tags:
Macrofinancial stability measures
Capital flow management
Scope:
World
Working Paper
World Bank Group (WBG)
(
2014
January
)
Since the 1980s and particularly since the 1990s, many emerging economies in Asia have undertaken significant efforts to liberalize and expand the scope and depth of their financial systems, though there is great heterogeneity across countries with regard to the timing of the reforms. The literature suggests several reasons for doing so.
Tags:
Regional financial cooperation and integration
Financial and capital market development
Scope:
Asia
Working Paper
International Monetary Fund (IMF)
(
2014
January
)
This paper examines how the financial activities of non-financial corporates (NFCs) in international markets potentially affects domestic monetary aggregates and financial conditions. Monetary aggregates reflect, in part, the activities of NFCs, who channel capital market financing into the domestic banking system, thereby influencing funding conditions and credit availability.
Tags:
Financial resilience and stability
Risks arising from non-financial stressors
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2014
January
)
The growing weight of the People’s Republic of China (PRC) in the world economy, measured by gross domestic product (GDP) and trade volume, has intensified debate on the potential international role of its currency - the renminbi (RMB). This paper provides an overview of RMB internationalization issues. Reviewing the current state of RMB internationalization, the paper finds that much progress has been made on RMB settlements for trade involving the PRC and on RMB-denominated bond issuance in Hong Kong, China, but that RMB internationalization is still limited due to capital account controls.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Currency unions, intervention, and manipulation
Scope:
China, People's Republic of
Working Paper
Bank for International Settlements (BIS)
(
2014
January
)
If the criteria for an institution’s success are diffusion and longevity, then central banking has been hugely successful. But if the criterion is the degree to which it has achieved its goals, then the evaluation has to be more nuanced. Historically, those goals have included a changing mix of financial and monetary stability. Attaining monetary and financial stability simultaneously has proved elusive across regimes.
Tags:
Macrofinancial stability measures
Capital flow management
Macroprudential policy coordination
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2014
January
)
This paper studies the effects of the new Basel III liquidity regulations in jurisdictions with a limited supply of high-quality liquid assets. Using a model based on Bech and Keister (2013), it shows how introducing a liquidity coverage ratio in such settings can have significant side effects, leading to a large liquidity premium and pushing the short-term interest rate to the floor of the central bank’s rate corridor.
Tags:
Macrofinancial stability measures
Capital flow management
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2014
January
)
Using three distinct approaches - statistical filtering, production function, and multivariate model - this paper estimates potential growth for the People's Republic of China, India, and five ASEAN countries (Indonesia, Malaysia, the Philippines, Thailand, and Viet Nam) during 1993-2013.
Tags:
Regional financial cooperation and integration
Financial and capital market development
Scope:
Asia
Working Paper
World Bank Group (WBG)
(
2014
January
)
In May 2013, Federal Reserve officials first began to talk of the possibility of tapering their security purchases. This tapering talk had a sharp negative impact on emerging markets. Different countries, however, were affected very differently. This paper uses data on exchange rates, foreign reserves and equity prices between April and August 2013 to analyze who was hit and why.
Tags:
Financial resilience and stability
Risks arising from non-financial stressors
Financial stress in developing and emerging markets
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2014
January
)
In the run-up to the financial crisis, the world economy was characterized by large and growing current account imbalances. Since the onset of the crisis, the People’s Republic of China and the United States have rebalanced. As a share of gross domestic product, their current account imbalances are now less than half their pre-crisis levels.
Tags:
Risks arising from non-financial stressors
Financial stress in developing and emerging markets
Architecture and fund size
Scope:
China, People's Republic of
Working Paper
Asian Development Bank Institute (ADBI)
(
2014
January
)
For many observers, internationalization is the yuan’s manifest destiny - an irresistible byproduct of the remarkable economic success of the People’s Republic of China (PRC). But is such confidence warranted? Recent history has seen the emergence of other currencies that were also expected, at least for a while, to attain wide, growing cross-border use. These included the deutsche mark (DM), the Japanese yen, and the euro (successor to the DM).
Tags:
Financial resilience and stability
Currency and foreign exchange market
Currency unions, intervention, and manipulation
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2014
February
)
Stock markets play a key role in corporate financing in Asia. However, despite their increasing importance in terms of size and cross-border investment activity, the region’s markets are reputed to be more “idiosyncratic” and less reliant on economic and corporate fundamentals in their pricing. Using a model that draws on international asset pricing and economic theory, as well as accounting literature, we find evidence of greater idiosyncratic influences in the pricing of Asia’s stock markets, compared to their G-7 counterparts, beyond the identified systematic factors and local fundamentals.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Scope:
Asia
Working Paper
International Monetary Fund (IMF)
(
2014
February
)
The paper shows that foreign holdings of local currency government bonds in emerging market countries (EMs) have reduced bond yields but have somewhat increased yield volatility in the post-Lehman period. Econometric analyses conducted from a sample of 12 EMs demonstrate that these results are robust and causal.
Tags:
Financial resilience and stability
Capital market
Public and private sector debt and leverage
Macrofinancial stability measures
Capital flow management
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2014
February
)
Since the formal launch of the renminbi trade settlement scheme in 2009, renminbi internationalization has made impressive inroads. The progress in renminbi trade settlement is especially impressive. However, Hong Kong, China’s offshore renminbi deposits failed to make significant progress as expected. The question of how far renminbi internationalization can go has become a common concern in the international financial community.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Currency unions, intervention, and manipulation
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2014
February
)
This paper examines whether the renminbi (RMB) has supplanted the US dollar as the major anchor currency in the currency baskets of East Asian economies.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Foreign exchange market development
Scope:
East Asia
Working Paper
International Monetary Fund (IMF)
(
2014
February
)
In recent years, macroprudential policy has become an increasingly active policy area. Many countries have adopted it as a tool to safeguard financial stability, in particular to deal with the credit and asset price cycles driven by global capital flows. This paper reviews the use of key macroprudential instruments and capital flow measures in 13 Asian economies and 33 economies in other regions since 2000, and constructs various macroprudential policy indices, aggregating sub-indices on key instruments.
Tags:
Macrofinancial stability measures
Capital flow management
Macroprudential policy coordination
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2014
February
)
As Asia considers greater harmonization and integration of its financial systems, it would be well-advised to consider the experience of Europe, particularly the eurozone. There are many lessons to be drawn from Europe about how to implement such integration, mostly negative. It is particularly evident that moving to a currency union had major unanticipated consequences for the ability to manage integration of financial systems within the eurozone. Monetary union sharply reduced the ability of the member states of the eurozone to manage their macroeconomic and macroprudential policies to preserve financial stability.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
Asia
Discussion Paper
Bank of Japan (BoJ)
(
2014
February
)
This paper analyzes the case for the international coordination of macroprudential policies in the context of a simple theoretical framework. Both domestic macroprudential policies and prudential capital controls have international spillovers through their impact on capital flows. The uncoordinated use of macroprudential policies may lead to a “capital war” that depresses global interest rates. International coordination of macroprudential policies is not warranted, however, unless there is unemployment in some countries. There is scope for Pareto-improving international policy coordination when one part of the world is in a liquidity trap while the rest of the world accumulates reserves for prudential reasons.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2014
February
)
The Asian financial crisis (1997-1998) and the global financial crisis (2007-2009) highlighted the potential value of financial regionalism, i.e., regional-level cooperation in financial policy. This paper argues that there is a mediating role for regional-level institutions of financial regulation between national regulators in Asia and global-level institutions such as the International Monetary Fund and the Financial Stability Board.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2014
February
)
The squeeze in United States dollar liquidity that emerged with the global financial crisis highlighted the risks inherent in the current global financial system. Asia was adversely affected by the crisis not only because of its dependence on trade, but also because of its heavy reliance on the US dollar for regional and international transactions. As Asia’s role in the global economy continues to expand, its dependence on the US dollar is bound to increase, raising further its vulnerability to future liquidity shocks. The use of regional currencies for bilateral trade settlement could reduce such vulnerability.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Currency unions, intervention, and manipulation
Regional financial cooperation and integration
Banking and capital market integration
Cross-border settlement infrastructure
Scope:
Asia
Working Paper
Bank for International Settlements (BIS)
(
2014
February
)
The global long-term interest rate now matters much more for the monetary policy choices facing emerging market economies than a decade ago. The low or negative term premium in the yield curve in the advanced economies from mid-2010 has pushed international investors into EM local bond markets: by lowering local long rates, this has considerably eased monetary conditions in the emerging markets. It has also encouraged much increased foreign currency borrowing in international bond markets by emerging market corporations, much of it by affiliates offshore. These developments strengthen the feedback effects between bond and foreign exchange markets. They also have significant implications for local banking systems.
Tags:
Macrofinancial stability measures
Capital flow management
Scope:
World
Book
Bank of Japan (BoJ)
(
2014
February
)
The structural changes that have occurred in the past 25 years in the economic and financial environment are comparable in scale to those in international politics. In particular, “/1” has been crucial in two respects.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Asia
Working Paper
International Monetary Fund (IMF)
(
2014
February
)
Asia proved to be remarkably resilient in the face of the global financial crisis, but why was its output performance stronger than that of other regions? The paper shows that better initial conditions - in the form of lower external and financial vulnerabilities - contributed significantly to Asia’s resilience.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Asia
Working Paper
Bank for International Settlements (BIS)
(
2014
December
)
Using a novel database on capital flow measures in Asia over 2004-2013, this paper investigates the impact of bond inflow measures on the cross-market correlations of weekly bond fund flows and of daily bond returns in 12 Asia-Pacific economies, after controlling for global, regional and local factors. It finds that a bond inflow measure taken by a country tends to increase the correlation of bond flows into the country with those into other countries in the region.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
Asia
Working Paper
Bank for International Settlements (BIS)
(
2014
December
)
This paper considers the role of exchange rate risk in influencing local currency sovereign bond yields in emerging market economies (EMEs). It explicitly accounts for exchange rate expectations and uncertainty around them, as measured by exchange rate volatility.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
World
Discussion Paper
Bank of Japan (BoJ)
(
2014
December
)
The paper assesses how close Asian countries are to an Optimal Currency Area in terms of business cycle synchronization, with a focus on supply shock asymmetry. Based on a Structural VAR model, the importance of symmetric and asymmetric supply shocks is tested for all ASEAN+3 countries. In addition, a spatial approach is used to analyze its impact on the whole Asian region and on pairs of Asian countries.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Currency unions, intervention, and manipulation
Scope:
Asia
Working Paper
Bank for International Settlements (BIS)
(
2014
December
)
Markets remain buoyant despite mid-October’s spike in the volatility of most asset classes. This sharp retreat in risk appetite reflected growing uncertainty about the global economic outlook and monetary policy stance, as well as increased geopolitical tensions. As selling pressure increased, market liquidity temporarily dried up, amplifying market movements.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2014
December
)
The impact of monetary policy in large advanced countries on emerging market economies - dubbed spillovers - is hotly debated in global and national policy circles. When the U.S. resorted to unconventional monetary policy, spillovers on asset prices and capital flows were significant, though remained smaller in countries with better fundamentals
Tags:
Financial resilience and stability
Risks arising from non-financial stressors
Financial stress in developing and emerging markets
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2014
December
)
This paper reviews the role of long-term interest rates in international monetary transmission and related policy challenges in the wake of exceptionally easy US monetary policy. It employs a panel VAR model to examine the impact of a very low US term premium on relatively small open Asian economies.
Tags:
Financial resilience and stability
Risks arising from non-financial stressors
Financial stress in developing and emerging markets
Scope:
Asia
Working Paper
International Monetary Fund (IMF)
(
2014
December
)
Capital markets can improve risk sharing and the efficiency with which capital is allocated to the real economy, boosting economic growth and welfare. However, despite these potential benefits, not all countries have well developed capital markets. Moreover, government-led initiatives to develop local capital markets have had mixed success. This paper reviews the literature on the benefits and costs of developing local capital markets, and describes the challenges faced in the development of such markets. The paper concludes with a set of policy recommendations emerging from this literature.
Tags:
Regional financial cooperation and integration
Financial and capital market development
Scope:
World
Discussion Paper
Bank of Japan (BoJ)
(
2014
August
)
This paper develops a variation of the macroeconomic model of banking in Gertler and Kiyotaki (2011) that allows for liquidity mismatch and bank runs as in Diamond and Dybvig (1983). As in Gertler and Kiyotaki, because bank net worth fluctuates with aggregate production, the spread between the expected rates of return on bank assets and deposits fluctuates countercyclically. However, because bank assets are less liquid than deposits, bank runs are possible as in Diamond and Dybvig.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2014
August
)
This paper investigates global factors associated with bank capital flows. It formulates a model of the international banking system where global banks interact with local banks. The solution highlights the bank leverage cycle as the determinant of the transmission of financial conditions across borders through banking sector capital flows.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2014
August
)
The network pattern of financial linkages is important in many areas of banking and finance. Yet bilateral linkages are often unobserved, and maximum entropy serves as the leading method for estimating counterparty exposures. This paper proposes an efficient alternative that combines information-theoretic arguments with economic incentives to produce more realistic interbank networks that preserve important characteristics of the original interbank market.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
World
Policy Brief
Economic Research Institute for ASEAN and East Asia (ERIA)
(
2014
August
)
Financial integration has many potential economic benefits. However, it also carries potential risks. In ASEAN, since its financial sector is generally bank-dominated, the banking sector is a key driver in the financial integration process. The ASEAN Banking Integration Framework (ABIF) aims to provide financial stability in the region and achieve multilateral liberalization in the banking sector by 2020 for ASEAN commercial banks.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Financial integration implications
Scope:
Southeast Asia
Discussion Paper
Bank of Japan (BoJ)
(
2014
August
)
Based on a novel quarterly dataset for 52 countries for the period 1970-2011, this paper analyzes the use and cyclical properties of reserve requirements (RR) as a macroeconomic stabilization tool and whether RR policy substitutes or complements monetary policy.
Tags:
Risks arising from non-financial stressors
Financial stress in developing and emerging markets
Architecture and fund size
Scope:
World
Working Paper
South East Asian Central Banks (SEACEN)
(
2014
August
)
This paper analyzes the effects of the trade and financial networks on the propagation of the global financial crisis of 2008. It adopts a new methodology that incorporates a dynamic network approach into econometric analysis. Some interesting results are obtained.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Regional financial cooperation and integration
Financial integration implications
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2014
August
)
In analyzing the performance of the international monetary and financial system (IMFS), too much attention has been paid to the current account and far too little to the capital account. This is true of both formal analytical models and historical narratives. This approach may be reasonable when financial markets are highly segmented. But it is badly inadequate when they are closely integrated, as they have been most of the time since at least the second half of the 19th century.
Tags:
Regional financial cooperation and integration
Financial and capital market development
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2014
August
)
“Abenomics” refers to the economic policies advocated by Prime Minister Shinzo Abe who became prime minister of Japan for a second time when his party, the Liberal Democratic Party, won an overwhelming majority at the general election in December 2012.
Tags:
Macrofinancial stability measures
Capital flow management
Macroprudential policy coordination
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Japan
Discussion Paper
Bank of Japan (BoJ)
(
2014
August
)
The four major banks (BOJ, FRB, BOE and ECB) have adopted unconventional monetary policy, or broadly-defined quantitative easing (QE), in the last several years. The broadly-defined QE can be classified into comprehensive easing (CE) and pure-QE. The former is aimed at purchasing assets of dysfunctional markets and the latter is aimed at expanding monetary base to stimulate demands.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
Japan
Working Paper
Asian Development Bank Institute (ADBI)
(
2014
April
)
This paper discusses Japan’s strategy for Asian monetary integration. It argues that Japan faces three major policy challenges when promoting intraregional exchange rate stability.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Scope:
Japan
Working Paper
Asian Development Bank Institute (ADBI)
(
2014
April
)
This paper analyzes the optimal transition of the exchange rate regime in the People’s Republic of China (PRC). How the PRC can successfully reach the desired regime - whether a basket peg or floating regime - from the current dollar-peg regime remains a major question. To answer it, we develop a dynamic small open-economy general equilibrium model.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Foreign exchange market development
Scope:
China, People's Republic of
Working Paper
International Monetary Fund (IMF)
(
2014
April
)
This paper documents the behavior of macro and credit variables during episodes of capital inflows reversals in economies with different degrees of exchange rate flexibility. It finds that exchange rate flexibility is associated with milder credit growth during the boom but, even though smaller than in more rigid regimes, it cannot shield the economy from a credit reversal.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Macrofinancial stability measures
Capital flow management
Scope:
World
Working Paper
World Bank Group (WBG)
(
2014
April
)
This paper considers the question of whether international banks learn from their previous crisis experiences and reduce their lending to developing countries in the event of a financial crisis. The analysis combines a bank-level dataset of bank activity and ownership with country-level data on the stock of historical crisis events between 1800 and 2005.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2014
April
)
This study presents evidence of the renminbi’s growing influence in the Asia-Pacific region. The CNH market - the offshore renminbi foreign exchange market in Hong Kong, China - is found to exert an effect on Asian currencies that is distinct from that of the onshore (CNY) market.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Currency unions, intervention, and manipulation
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2014
April
)
Domestic financial market development is a key determinant of a currency’s international status, and financial depth and market liquidity are two essential attributes for an international currency. This paper discusses the status of the People’s Republic of China’s (PRC) financial markets and their depth and liquidity conditions.
Tags:
Regional financial cooperation and integration
Financial and capital market development
Scope:
China, People's Republic of
Working Paper
Asian Development Bank Institute (ADBI)
(
2014
April
)
This paper investigates the determinants of currency choice for trade invoicing in a cross-country context while focusing on the link between capital account liberalization and its impact on the use of the renminbi (RMB). It finds that while countries with more developed financial markets tend to invoice less in the US dollar, countries with more open capital accounts tend to invoice in either the euro or their home currency.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Currency unions, intervention, and manipulation
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2014
April
)
The People’s Republic of China (PRC) has been quite aggressive recently in promoting the international use of its currency, the renminbi. Historical experience suggests that an active offshore market is essential for a global currency. Indeed, anecdotal evidence affirms the role of offshore markets in pushing the renminbi currency to the world.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Foreign exchange market development
Scope:
China, People's Republic of
Working Paper
World Bank Group (WBG)
(
2014
April
)
As the recovery in high-income countries firms amid a gradual withdrawal of extraordinary monetary stimulus, developing countries can expect stronger demand for their exports as global trade regains momentum, but also rising interest rates and potentially weaker capital inflows. This paper assesses the implications of a normalization of policy and activity in high-income countries for financial flows and crisis risks in developing countries.
Tags:
Macrofinancial stability measures
Capital flow management
Macroprudential policy coordination
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2014
April
)
This paper develops a multilateral currency system where national currencies are used for trade settlement in East Asia, comprising the Association of Southeast Asian Nations (ASEAN) member countries, the People’s Republic of China, Japan, and the Republic of Korea (ASEAN+3).
Tags:
Financial resilience and stability
Currency and foreign exchange market
Currency unions, intervention, and manipulation
Scope:
East Asia
Southeast Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2013
September
)
This paper analyzes the evolution of East Asian monetary policy frameworks over the past two decades, chiefly in response to shocks from the Asian financial crisis of 1997-1998 and the global financial crisis (GFC) of 2007-2009. The Asian financial crisis showed the importance of exchange rate flexibility and credible policy frameworks, leading to increased central bank independence, greater focus on inflation policy and more flexible exchange rates.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
East Asia
Working Paper
Bank for International Settlements (BIS)
(
2013
October
)
This study primarily examines the extent of daily foreign exchange intervention by the Bangko Sentral ng Pilipinas (BSP) between 2005 and 2010, and its effectiveness in controlling the daily volatility of the exchange rate. Using an exponential GARCH model, it finds that participation in the spot market remains the main method used by the BSP to influence the volatility of the exchange rate, while intervention in the foreign exchange market through derivatives is secondary.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
Philippines
Working Paper
Bank for International Settlements (BIS)
(
2013
October
)
Unlike most other countries, Singapore has adopted the use of the exchange rate rather than the interest rate as the instrument of monetary policy. The choice of the exchange rate is predicated on the Singapore economy’s small size and its high degree of openness to trade and capital flows. The basket, band and crawl features of the exchange rate system have served as an effective anchor of price stability, keeping inflation low and stable over the past 30 years. In addition, Singapore has complemented monetary policy with micro- and macroprudential measures to ensure overall price and financial stability in the economy.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
Singapore
Working Paper
Peterson Institute for International Economics (PIIE)
(
2013
October
)
The European and Asian financial crises are the two most recent major regional crises. This paper compares their origins and evolution. The origins of the two sets of crises were different in some respects, but broadly similar. The two sets of crises also shared similarities in their evolution, but here the differences were more significant.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
Asia
European Union
Working Paper
Asian Development Bank (ADB)
(
2013
October
)
This paper analyzes the determinants of corporate saving in the form of changes in the stock of cash for 11 Asian economies using firm-level data from the Oriana Database for the 2002-2011 period. It finds some evidence that cash flow has a positive impact on the change in the stock of cash, which suggests that Asian firms are borrowing constrained and that they save more when their cash flow increases so that they will be able to finance future investments.
Tags:
Macrofinancial stability measures
Capital flow management
Scope:
Asia
Book
Asian Development Bank (ADB)
(
2013
October
)
The purpose of the study is to examine the development and barriers to harmonization and integration among the capital markets of members of the South Asian Association for Regional Cooperation (SAARC) and to enumerate steps to achieving harmonization and integration. There are substantial benefits to greater capital market harmonization but also significant obstacles.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Financial integration implications
Scope:
South Asia
Working Paper
World Bank Group (WBG)
(
2013
October
)
This paper analyzes the lending behavior of foreign owned banks during the recent global crisis. Using bank level panel data for countries in Central and Eastern Europe, East Asia, and Latin America, the paper explores the role of affiliate and parent financial characteristics, host location, as well as the impact of parent geographic origin and reach on foreign banks’ credit growth.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
World
Working Paper
University of California, Santa Cruz
(
2013
October
)
This paper reviews the East Asian experience with financial integration, how economies in the region have responded to shocks, and what they may do to continue to thrive in the future. It discusses openness to capital flows as a key aspect of financial integration, briefly considering the theoretical underpinnings and empirical evidence for the benefits of openness.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
East Asia
Working Paper
Bank for International Settlements (BIS)
(
2013
October
)
Given the rapid and volatile capital flows that emerging market economies (EMEs) have experienced in the years following the global financial crisis, foreign exchange market developments and the corresponding intervention by EME central banks have quickly become pertinent issues. To shed light on some of these issues from Malaysia’s perspective, this paper first highlights the motives for and recent trends in Malaysia’s foreign exchange interventions, followed by a discussion of their effectiveness. The paper then elaborates on Malaysia’s efforts to improve the management of foreign exchange volatility. Finally, the paper concludes by highlighting the importance of collaborative efforts to address the root cause of volatile capital flows.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Foreign exchange market development
Scope:
Malaysia
Working Paper
Bank for International Settlements (BIS)
(
2013
October
)
This paper provides an overview of the developments in the Korean foreign exchange market and the Bank of Korea's foreign exchange interventions since the introduction of the floating exchange rate regime in the Republic of Korea. It deals with institutional aspects such as the objectives, instruments employed, tactics and strategies of the interventions, as well as the sterilisation practices. It also explains why the won has been so volatile during the crisis period, and how the Korean authorities have addressed the vulnerability of the won via interventions and other macroprudential regulations.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Foreign exchange market development
Scope:
Korea, Republic of
Working Paper
Bank for International Settlements (BIS)
(
2013
October
)
Amid the evolving global financial landscape, different speeds of economic adjustments and spillovers of unconventional monetary policy, central banks in emerging economies, including Thailand, have encountered volatile capital flows and greater difficulties in maintaining economic stability. The conduct of exchange rate policy has been particularly challenging in these economies.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
Thailand
Working Paper
Bank for International Settlements (BIS)
(
2013
October
)
For a small open economy like Indonesia, exchange rate movement does not always reflect fundamental value. Increasing exchange rate volatility often occurs as a result of volatile capital flows, irrational behaviour of market players, the microstructure conditions of the market, and offshore market influence. In this case, relying solely on interest rate policy to achieve the inflation target and maintain stability is not always sufficient.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
Indonesia
Working Paper
Bank for International Settlements (BIS)
(
2013
October
)
The exchange rate of the rupee is determined largely by the market forces of demand and supply. The Reserve Bank of India has intervened occasionally to maintain orderly conditions and curb excessive volatility in the foreign exchange market. Being a current account deficit country, India is dependent on capital flows for financing the current account deficit. Given the dependence on volatile capital flows, there may be a case for augmenting forex reserves when the situation permits without any bias for a particular exchange rate band.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Macrofinancial stability measures
Capital flow management
Scope:
India
Working Paper
Asian Development Bank Institute (ADBI)
(
2013
October
)
In the currency wars of the 1920s and 1930s, various nations fell off the gold standard and in so doing experienced deep devaluations. But under the postwar dollar standard, the central position of the US was key to maintaining the peace, until the Bretton Woods system of fixed dollar exchange parities fell apart after the so-called “Nixon Shock” of 1971. Now, without much fear of retaliation, the US can initiate more limited currency warfare - as with American “Japan bashing” from the late 1970s to mid-1990s to appreciate the yen, or “China bashing” since 2002 to appreciate the renminbi.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Currency unions, intervention, and manipulation
Scope:
Japan
Working Paper
Bank for International Settlements (BIS)
(
2013
October
)
This paper documents the major policy reforms to Hong Kong, China’s Linked Exchange Rate System (LERS) that have enabled it to evolve into the highly credible, efficient, and transparent system it is today. It discusses the operating mechanism of the system in adjusting capital flows, and the role the Hong Kong Monetary Authority plays in maintaining the smooth functioning of the LERS.
Tags:
Macrofinancial stability measures
Capital flow management
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Hong Kong, China
Working Paper
Organisation for Economic Co-operations and Development (OECD)
(
2013
October
)
Financial inclusion is an international policy priority and demand-side initiatives including financial education have an important role to play in helping individuals to access and use appropriate, formal financial products. In 2010, under the support of the Russian Trust Fund for Financial Literacy and Education, the OECD/INFE launched a project on the role of financial education in financial inclusion.
Tags:
Financial inclusion
Financial literacy and education
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2013
October
)
The global financial crisis originated in advanced economies, but had a major impact on emerging markets. The impact, however, was not uniform. Even in a relatively homogenous group of countries such as ASEAN-4 (Indonesia, Malaysia, the Philippines and Thailand), there were considerable differences both in terms of instantaneous impact of the crisis and in terms of output performance relative to trend.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Scope:
Indonesia
Malaysia
Philippines
Thailand
Working Paper
World Bank Group (WBG)
(
2013
October
)
A likely image of the current state of the literature on financial sector development is that of a Swiss cheese with many holes inside important areas of knowledge. The aim of this synthesis paper is to map the current knowledge and ignorance (i.e., holes) in the literature by providing a narrative for the empirical findings of a comprehensive literature review concerning the quantitative effects of financial development on economic growth and employment, and various determinants of financial sector development.
Tags:
Macrofinancial stability measures
Sustainable finance measures
Sustainable finance concerning social and governance
Regional financial cooperation and integration
Financial and capital market development
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2013
November
)
This paper explores the determinants of Japanese banks’ overseas expansion and assesses whether the growing cross-border activity will continue under the new macroeconomic policies referred as “Abenomics”. The analysis finds that Japanese banks are well positioned to scale up foreign exposures, thanks to their relative resilient balance sheets and continued growth in the region.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
Japan
Working Paper
Asian Development Bank Institute (ADBI)
(
2013
November
)
This paper discusses how financial crises in emerging Asia and Japan worked as catalysts for legal reforms. The responses of six Asian countries with different legal histories to financial crises that posed similar challenges are of both legal and economic interest.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Asia
Report
South East Asian Central Banks (SEACEN)
(
2013
November
)
This publication is a collection of the papers cum notes prepared for and included here as Proceedings of the High-Level Conference on “Finding Asia’s New Sustainable Growth Model Post Global Financial Crisis (GFC): The Role of the Central Banks” held at Sasana Kijang, Bank Negara Malaysia, Kuala Lumpur, Malaysia, from 6-8 November 2012. The High-Level Conference was an outreach of the signature SEACEN research project for OP2012 to provide a forum for discussions on policy challenges faced by central banks in promoting sustainable economic growth and providing an environment conducive for financial, monetary and economic stability in the aftermath of the global financial crisis.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2013
May
)
The Association of Southeast Asian Nations (ASEAN) is expected to benefit from the significant growth in the Asia-Pacific payments market. Growth in economic activity would increase the size, scale, and scope of payment transactions. Enabling the scale and scope of payments would in turn increase economic activity. This would also require national payment systems to be regionalized and operate with cross-border and multi-currency capabilities.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Financial cooperation agreements and reforms
Scope:
Southeast Asia
Working Paper
International Monetary Fund (IMF)
(
2013
May
)
This paper analyses the extent to which financial integration impacts the manner in which terms of trade affect business cycles in emerging economies. Using a small open economy model, we show that as capital account openness increases in an economy that faces trade shocks, business cycle volatility reduces. For an economy with limited financial openness, and a relatively open trade account, a model with exogenous terms of trade shocks is able to replicate the features of the business cycle.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
World
Working Paper
Asian Development Bank (ADB)
(
2013
May
)
This paper aims to quantify the political risk effect and its different economic implications in normal and crisis situations through the proxy analysis of election and the sovereign bond spreads.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Financial resilience and stability
Risks arising from non-financial stressors
Scope:
World
Working Paper
Federal Reserve Bank of San Francisco (FRBSF)
(
2013
May
)
This paper presents empirical evidence on asset market linkages between the People's Republic of China and Asia and how these linkages have shifted during and after the global financial crisis of 2008-2009. We find only weak cross-country linkages in longer-term interest rates, but much stronger linkages in equity markets. This finding is consistent with the greater development and liberalization of equity markets relative to bond markets in the People's Republic of China, as well as increasing business and trade linkages in the region.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Scope:
Asia
China, People's Republic of
Working Paper
Asian Development Bank Institute (ADBI)
(
2013
May
)
Driven by waves of foreign capital inflows and outflows, Indonesia, the Republic of Korea, and Thailand - among several other emerging markets - have resorted to capital control policy since 2006. Are capital controls effective? Controls on capital inflows have been experiencing a renaissance since 2008, with several prominent Asian and Latin American countries implementing them. This paper focuses on Brazil, which instituted five changes in its capital account regime over 2008-2011.
Tags:
Macrofinancial stability measures
Capital flow management
Scope:
Asia
Working Paper
Asian Development Bank (ADB)
(
2013
March
)
The squeeze in US dollar liquidity that emerged with the global financial crisis highlighted the risks associated with the current global financial system. Asia was adversely affected by the crisis not only because of its dependence on trade, but also because of its heavy reliance on the US dollar for regional and international transactions.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Regional financial cooperation and integration
Banking and capital market integration
Cross-border settlement infrastructure
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2013
March
)
Using panel data for 15 economies from 2001-12, this paper identifies determinants of central bank foreign exchange intervention in emerging markets (“EMs”) with flexible to moderately managed exchange rates.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2013
March
)
An Asian Currency Unit (ACU) index is constructed using an alternative procedure which minimizes a basket or portfolio of assets expressed in terms of national currencies. Using this estimated ACU index and an ACU Deviation Indicator, the main finding of this study based on the current trajectory of East Asian currencies relative to this regional ACU average or benchmark is that there is a formation of two contrasting groups of countries in the region - one a group of strong currencies and the other a group of weak currencies.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Currency unions, intervention, and manipulation
Scope:
East Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2013
March
)
To the extent that financial contagion from the United States and the euro area crisis has occurred in Asia, this paper focuses on the importance of strengthening the regional financial safety nets.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Global and regional financial safety nets
Scope:
World
Publication
Asian Development Bank (ADB)
(
2013
March
)
A new regional community is in the making in Southeast Asia. At the 12th Summit of the Association of Southeast Asian Nations (ASEAN) in January 2007, the member countries affirmed their commitment to create the ASEAN Economic Community (AEC) by 2015 and “to transform ASEAN into a region with free movement of goods, services, investment, and skilled labor, and freer flow of capital.”
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Southeast Asia
Working Paper
Asian Development Bank (ADB)
(
2013
June
)
Financial integration is a multidimensional process through which allocation of financial assets becomes increasingly borderless. This paper assesses the progress achieved thus far in capital market integration in Asia, and compares regional capital market integration with global financial integration.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Financial integration implications
Scope:
Asia
Working Paper
Asian Development Bank (ADB)
(
2013
June
)
This paper studies the effects of the United States’ (US) quantitative easing on Asia by examining capital flows and financial markets. After the global financial crisis, Asian economies with more open and developed capital markets experienced greater swings in capital inflows. In particular, large capital flows were manifest more in portfolio investment and other investment such as bank loans than in foreign direct investment.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Financial resilience and stability
Capital market
Capital flow stability and volatility
Scope:
Asia
Working Paper
Asian Development Bank (ADB)
(
2013
June
)
Although growth deceleration in the People’s Republic of China (PRC) is inevitable, if the country’s new direction of financial policy (on exchange rate, capital flows, banking, capital market) can be achieved, it will be good not only for the country but also for the rest of Asia. This is consistent with the increased degree of Asia’s integration and interdependence.
Tags:
Macrofinancial stability measures
Capital flow management
Macroprudential policy coordination
Scope:
China, People's Republic of
Working Paper
Asian Development Bank Institute (ADBI)
(
2013
July
)
Japan’s “two lost decades” perhaps represent an extreme example of a weak recovery from a financial crisis, and are now referred to as “Japanization.” More recently, widespread stagnation in advanced economies in the wake of the global financial crisis led to fears that Japanization might spread to other countries.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Implications, lessons learned, and ways forward from financial crises
Scope:
Japan
Working Paper
Asian Development Bank (ADB)
(
2013
July
)
The global financial crisis of 2008-2009 illustrates how financial turmoil in advanced economies could trigger severe financial stress in emerging markets. Previous studies dealing with financial crises and contagion show the linkages through which financial stress are transmitted from advanced to emerging markets. This paper extends the existing literature on the use of financial stress index (FSI) in understanding the channels of financial transmission in emerging market economies.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2013
January
)
The recent crises highlighted the role of cross-border banking linkages. This paper proposes two new measures for better capturing creditor banking systems’ foreign credit exposures and borrower countries’ reliance on foreign bank credit, by combining BIS data with bank level data. The results indicate that the proposed refinements matter, especially when foreign bank affiliates’ funding relies heavily on local deposits.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2013
January
)
The unprecedented collapse of international interbank borrowing was a prominent feature of the global financial crisis that started in August 2007. This paper focuses on the drivers of the retrenchment from 32 advanced and emerging banking systems. Using novel risk-weighted indexes the paper examines whether the banking systems’ access to credit was related to their domestic financial soundness and exposure to distressed international counterparties. The empirical findings suggest that both domestic and international risk factors contributed to the decline in international interbank borrowing during the crisis.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
World
Working Paper
Asian Development Bank (ADB)
(
2013
January
)
The European Union (EU) has traditionally been an important economic partner for Asia. In addition to absorbing a significant share of the region’s exports, the EU has been a major source of foreign direct investment and other capital flows into the region. In light of such close economic linkages between the EU and Asia, the euro crisis will undoubtedly influence Asia’s short-term macroeconomic outlook. The key question, however, is how big the impact will be. This paper tries to answer this by examining both the trade and financial channels of crisis transmission.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
Asia
Europe
Working Paper
Asian Development Bank Institute (ADBI)
(
2013
January
)
The Chiang Mai Initiative Multilateralisation (CMIM) and the ASEAN+3 Macroeconomic Research Office (AMRO), established in March 2010 and May 2011, respectively, have made substantial headway. But despite the rapid progress, a series of fundamental questions have been raised, particularly about the size of the CMIM facility.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Southeast Asia
Working Paper
International Monetary Fund (IMF)
(
2013
January
)
The prolonged investment decline in post-Asian crisis emerging Asia, in contrast to the swift recovery of economic growth, has remained a puzzle. This paper shows that the post-crisis investment recession has been mainly concentrated in the nontradable sector, and hypothesizes that the slowdown is because firms operating in that sector are financially constrained. Empirical results based on macro and firm-level data from Indonesia, Malaysia, and Thailand (ASEAN-3) support this hypothesis.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
Indonesia
Malaysia
Thailand
Working Paper
Asian Development Bank (ADB)
(
2013
January
)
Financial conditions indexes (FCIs) are constructed for five Asian economies, namely, Hong Kong, China; Japan; the Republic of Korea; Malaysia; and Singapore, using a principal component analysis (PCA) methodology from Hatzius et al. (2010) and quarterly data. Various financial stress indicators are included, allowing the constructed Financial Condition Index to capture important episodes in each economy’s financial history.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
Asia
Working Paper
Asian Development Bank (ADB)
(
2013
January
)
Under near zero United States (US) interest rates, the international dollar standard malfunctions. Emerging markets with naturally higher interest rates are swamped with hot money inflows. Emerging market central banks intervene to prevent their currencies from rising precipitously.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
China, People's Republic of
Working Paper
Asian Development Bank Institute (ADBI)
(
2013
January
)
This paper focuses on the relevance to emerging economies of three major financial reforms following the global financial crisis of 2007-2009: (1) the improved capital requirements intended to reduce the risk of bank failure (“Basel III”), (2) the improved recovery and resolution regimes for global banks, and (3) the development of supervisory colleges of cross-border financial institutions to improve supervisory cooperation and convergence. The paper also addresses the implications of these regulatory reforms for Asian emerging markets.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
World
Working Paper
National Bureau of Economic Research (NBER)
(
2013
January
)
Research in the early 1980s found that the gains from international coordination of monetary policy were quantitatively small compared to simply getting domestic policy right. That prediction turned out to be a pretty good description of monetary policy in the 1980s, 1990s, and until recently. Because this balanced international picture has largely disappeared, the 1980s view about monetary policy coordination needs to be reexamined.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
World
Working Paper
World Bank Group (WBG)
(
2013
January
)
Confidence in combining inflation-targeting cum-flexible-exchange-rate regimes with isolated microprudential regulation as a means to guarantee both macroeconomic and financial stability has been shattered by the scale and synchronization of asset price booms and busts that preceded the current global financial crisis.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Working Paper
Asian Development Bank (ADB)
(
2013
January
)
This paper employs multivariate Generalized Autoregressive Conditional Heteroskedastic (GARCH) models with a Baba-Engle-Kraft-Kroner (BEKK) specification to show significant shock and volatility spillovers from mature bond markets into select emerging Asian local currency bond markets.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
Asia
Working Paper
Asian Development Bank (ADB)
(
2013
February
)
The purpose of this study is to investigate how firms responded to the deterioration of bank health during the financially turbulent periods in the 2000s in making investment decisions and in meeting demand for liquidity. A rise in uncertainty regarding the ability to obtain external funds may have induced firms to rely on internal funds to finance investment activities.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Working Paper
Bureau for International Settlements (BIS)
(
2013
February
)
This paper explores the concept of global liquidity based on a factor model estimated using a large set of financial and macroeconomic variables from 24 advanced and emerging market economies. It measures global liquidity conditions based on the common global factors in the dynamics of liquidity indicators. By imposing theoretically motivated sign restrictions on factor loadings, it achieves a structural identification of the factors.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2013
December
)
Standard measures of real economic co-movement between Asia-Pacific economies and those elsewhere had been observed to follow a downward trend, leading some commentators to suggest that the region was decoupling. However, this process reversed in response to the International Financial Crisis, and co-movement increased to historically high levels for some economies.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2013
December
)
In May 2013, the ASEAN+6 countries began to negotiate the Regional Comprehensive Economic Partnership (RCEP). The objective of this paper is to analyze the feasibility of constructing such a region-wide agreement and to examine ways to multilateralize it.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Financial integration implications
Scope:
Asia
Working Paper
International Monetary Fund (IMF)
(
2013
December
)
Offshore use of the renminbi expanded rapidly in Hong Kong, China as the People's Republic of China sought to develop an international role for its currency while maintaining capital controls. This prompts two questions addressed in this paper: How far advanced is renminbi internationalization? And, what role does Chinese capital account liberalization play?
Tags:
Financial resilience and stability
Currency and foreign exchange market
Currency unions, intervention, and manipulation
Macrofinancial stability measures
Capital flow management
Scope:
Hong Kong, China
Working Paper
International Monetary Fund (IMF)
(
2013
December
)
The paper tests the effectiveness of financial soundness indicators (FSIs) as harbingers of banking crises, using multivariate logit models to see whether FSIs, broad macroeconomic indicators, and institutional indicators can indeed predict crisis occurrences.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2013
December
)
While fiscal conditions remain healthier than in advanced economies, emerging economies continue to be exposed to negative spillovers if global conditions were to become less favorable. This paper finds that domestic bond yields in emerging economies are heavily influenced by two international factors: global risk appetite and global liquidity.
Tags:
Financial resilience and stability
Risks arising from non-financial stressors
Financial stress in developing and emerging markets
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2013
December
)
This paper examines two explanations for the recent spate of complaints about cross-border monetary policy spillovers and calls for international monetary policy coordination, a development that contrasts sharply with the monetary system in the 1980s, 1990s and until recently.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2013
August
)
The purpose of this study is to better understand the likely impact on Asian economies and financial institutions of various recent global financial reforms, including Basel III capital adequacy and liquidity rules.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
Asia
Book
Southeast Asian Central Banks (SEACEN)
(
2013
August
)
Recent financial crises have brought into focus the importance of financial stability indicators and the need for effective monitoring of these indicators to assess the strengths and vulnerabilities of financial systems. The deregulation of the financial system has encouraged firms to be more profit seeking and innovative increasing their risk taking activities and making the financial system more prone to volatility and failure.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
World
Working Paper
Asian Development Bank (ADB)
(
2013
April
)
Motivated by the literature on the finance - growth nexus, this paper explores the mechanisms through which finance affects corporate investments and capital accumulation. It separates the effects of financial conditions from those of financial development.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Scope:
Asia
Working Paper
Bank for International Settlements (BIS)
(
2013
April
)
Measures of de facto capital account openness for the People's Republic of China and India raise the question whether the Chinn-Ito measure of de jure capital account openness is useful and whether the Lane-Milesi-Ferretti measure of de facto openness ranks the two countries correctly. We examine eight dimensions of de facto capital account openness.
Tags:
Macrofinancial stability measures
Capital flow management
Scope:
China, People's Republic of
India
Working Paper
Peterson Institute for International Economics (PIIE)
(
2012
September
)
This paper examines the exchange rate regimes of East Asian countries since the initial shift by the People's Republic of China to a controlled appreciation in July 2005, testing econometrically the weights of key currencies in the implicit baskets that appear to be targeted by East Asian monetary authorities.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
East Asia
Southeast Asia
Working Paper
World Bank Group (WBG)
(
2012
September
)
This paper provides the first comprehensive documentation of how firms use domestic and international corporate bond markets. Debt issues in domestic and international markets have different characteristics, not explained by differences across firms or countries. International issues tend to be larger, of shorter maturity, denominated in foreign currency, include more fixed rate contracts, and entail lower yields.
Tags:
Financial resilience and stability
Capital market
Public and private sector debt and leverage
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2012
October
)
This paper shows that the Japanese foreign exchange interventions in 2003/04 seem to have lowered long-term interest rates in a wide range of countries, including Japan. It seems that this decline was triggered by the investment of the intervention proceeds in US bonds and that a global portfolio balance effect spread the resulting decline in US yields to other bond markets, thus easing global monetary conditions.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Macrofinancial stability measures
Capital flow management
Scope:
Japan
Working Paper
Asian Development Bank Institute (ADBI)
(
2012
October
)
The paper reviews the experience of regional economic cooperation in the Gulf Cooperation Council (GCC). Conceived as a regional security alliance, the GCC has evolved to become a common market in the making. All six GCC countries participate in the common market project, and additional countries may join. But the timing of introducing a common currency, initially targeted for 2010, remains uncertain, especially in the light of the ongoing euro area crisis.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Financial cooperation agreements and reforms
Scope:
Asia
Middle East
Working Paper
Asian Development Bank Institute (ADBI)
(
2012
October
)
Financial globalization has gathered attention since the early 1990s because of its macrofinancial and crisis implications and its perceived large expansion. But financial globalization has taken different forms over time. This paper examines two important concurrent dimensions of financial globalization relevant for emerging countries: diversification and offshoring. The diversification dimension of globalization refers to the increase in foreign assets and liabilities in countries’ portfolios.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2012
October
)
This paper discusses the relevance of Basel III to Asian emerging markets. It reviews some of the proposed regulations of Basel III in order to evaluate their likely implications for, and their ability to enhance, the stability of the banking and financial system. This is followed by a discussion on the challenges faced by the regulators of Asian emerging markets in effectively managing their financial regulations, given their capacity and institutional constraints.
Tags:
Regional financial cooperation and integration
Financial and capital market development
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2012
October
)
This paper examines some of the macro-financial dimensions of sovereign risk and propose a conceptual framework that captures risks other than just the default risk. Morphed under a multi-dimensional notion of sovereign risk, we argue that the existing empirical methodologies to measure sovereign risk cover only partial aspects of sovereign risk and fail to capture its macro-financial dimensions. It highlights a menu of tools that could be used to tackle the broader notion of sovereign risk, and suggest that authorities should actively use them to manage the macro-financial dimensions of sovereign risk before those risks feed into the real economy.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2012
November
)
Over the past three years, cross-border inflows into emerging market (EM) local currency bonds have surged. The returns on these bonds have moved more closely with those on international assets regarded as “safe”, particularly following the euro area debt crisis.
Tags:
Financial resilience and stability
Capital market
Public and private sector debt and leverage
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2012
November
)
Financial safety nets in Asia have come a long way since the Asian Financial Crisis (AFC) of 1997-98. Not wanting to rely solely on the International Monetary Fund (IMF) again, the Chiang Mai Initiative (CMI) was created in 2000. When the CMI also proved inadequate following the Global Financial Crisis (GFC), it was first multilateralized (CMIM), and then doubled in size to $240 billion, while the IMF de-linked portion was increased to 30%.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Global and regional financial safety nets
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2012
November
)
The rise of regional monetary arrangements poses a challenge for the International Monetary Fund (IMF)'s global surveillance efforts. This paper reviews how the IMF has responded to earlier regional initiatives, from the European Payments Union of the 1950s and the Gold Pool of the 1960s to the CFA franc zone and the European Monetary System. The penultimate section draws out the implications for monetary regionalism in East Asia.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2012
November
)
This paper examines how Asian financial linkages with systemic economies have changed over time. After developing a factor model, it estimates Asian financial sensitivities to systemic economies, and then seeks to uncover their key determinants, which include trade and financial linkages, as well as policies.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
World
Policy Paper
The Research Institute of Economy, Trade and Industry (REITI) Japan
(
2012
May
)
After the global financial crisis, it has become more recognized that the policy dialogues among both emerging and advanced economies on the exchange rate is necessary to prevent competitive devaluation. In this context, East Asian countries should also choose an adequate exchange rate system. However, there still exists a variety of exchange rate regimes in this area, which might suggest a possibility of coordination failure. To avoid this, the establishment of stable exchange rate linkages and the enhancement of monetary policy credibility in East Asia are needed.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
Asia
Japan
Working Paper
International Monetary Fund (IMF)
(
2012
May
)
Despite robust deposit growth, credit growth has been sluggish in the Philippines. This paper attributes this to legacy weaknesses in bank balance sheets, consumption-led economic growth, and relatively high net interest margins. Bank-level analysis suggests that interest margins in the Philippines rise with bank size, bank capitalization, foreign ownership, overhead costs and tax rates.
Tags:
Financial resilience and stability
Capital market
Public and private sector debt and leverage
Scope:
Asia
Philippines
Working Paper
Asian Development Bank (ADB)
(
2012
May
)
This case study explores which variables - macroeconomic, institutional, and capital controls - are most important in explaining cross-country differences in bond market development. It uses the ratio of amount of local currency bonds outstanding over GDP as a measure of bond market development from 43 countries during 1990-2009. The study examines government and corporate bond markets separately, as the characteristics of these markets are substantially different and requires separate examination.
Tags:
Macrofinancial stability measures
Capital flow management
Macroprudential policy coordination
Regional financial cooperation and integration
Financial and capital market development
Scope:
World
Background Paper
United Nations Conference on Trade and Development (UNCTAD)
(
2012
March
)
Whilst the first steps towards Asian trade cooperation stated in 1970s, it was the Asian Financial Crisis of 1997 that triggered Asian efforts at monetary and financial integration. This paper argues that the conditions for Asian monetary integration are not conducive but that efforts at monetary cooperation should proceed at three fronts - exchange rate cooperation, coordination of capital flows control, and strengthening of regional financial liquidity management as in the Chiang Mai Initiative and regional surveillance.
Tags:
Macrofinancial stability measures
Capital flow management
Regional financial cooperation and integration
Financial integration implications
Scope:
Asia
Research Paper
Munich Personal RePEc Archive (MPRA)
(
2012
March
)
This paper presents a joint investigation of the international parity conditions between the People's Republic of China and her 13 major trading partners in the Asia Pacific over globalization era. Several advanced tests of unit root for univariate and panel series are utilized in the analyses.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Financial integration implications
Scope:
Asia
Book
Asian Development Bank Institute (ADBI)
(
2012
March
)
The 1997-1998 Asian financial crisis highlighted shortcomings in Asian financial markets, notably the underdevelopment of domestic bond markets and deficiencies in corporate governance, transparency and financial regulation. Since then, Asian financial markets have made considerable progress.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
World
Book
Asian Development Bank Institute (ADBI)
(
2012
March
)
In most Asian economies, the global financial crisis is increasingly becoming a thing of the past. By mid-2009 recovery was already evident in much of the region; in 2010 it was by far the fastest growing region of the world. Among the most impressive performers have been the dynamic economies of the People’s Republic of China and India, each of which registered growth approaching or exceeding 10 percent for the year.
Tags:
Macrofinancial stability measures
Capital flow management
Macroprudential policy coordination
Scope:
Asia
Working Paper
Organisation for Economic Co-operations and Development (OECD)
(
2012
June
)
Using the 2008-09 global financial crisis, this paper examines the role of different forms of international financial integration for asset price contagion in crisis times. Defining contagion as the transmission of financial market movements beyond the co-movements that would occur in “tranquil” times, the paper looks into the presence of contagion in the period of turmoil prior to the fall of Lehman Brothers, in the main crisis period following the Lehman collapse, and in the ensuing late stages of the crisis.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Implications, lessons learned, and ways forward from financial crises
Regional financial cooperation and integration
Financial integration implications
Scope:
World
Working Paper
Organisation for Economic Co-operations and Development (OECD)
(
2012
June
)
This paper examines whether the composition of a country’s external liabilities and assets has an incidence on its risk of suffering financial turmoil. Particular emphasis is put on the role of international financial integration, using newly-constructed measures of contagion shocks. These new measures capture well the contagion observed e.g. in the wake of the Mexican and Asian crises, and confirm that contagion shocks observed in 2009/10 dwarfed those observed during previous financial crises.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Policy Note
Organisation for Economic Co-operations and Development (OECD)
(
2012
June
)
One factor that made the recent financial crisis so deep and widespread is the extent and nature of international banking integration, which led to unprecedented transmission of financial instability.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Regional financial cooperation and integration
Financial integration implications
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2012
June
)
Regional integration of Pacific Island countries (PICs) with Australia, New Zealand, and emerging Asia has increased over the last two decades. PICs have become more exposed to the region’s business cycles, and spillovers from regional economies are more important for PICs than from advanced economies outside the region. While strong linkages with Asia would help in the event of a global downturn, PICs remain particularly vulnerable to global commodity price shocks. It uses a Vector Error Correction Model (VECM) for each PIC to gauge the impact of global and regional growth spillovers.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
The Pacific
Working Paper
Organisation for Economic Co-operations and Development (OECD)
(
2012
June
)
This paper examines how structural policies can influence a country's risk of suffering financial turmoil. Using a panel of 184 developed and emerging economies from 1970 to 2009, the empirical analysis examines which structural policies can affect financial stability by either shaping the financial account structure, by reducing the risk of international financial contagion, or by directly reducing the risk of financial crises.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Financial resilience and stability
Risks arising from non-financial stressors
Scope:
World
Policy Paper
Organisation for Economic Co-operations and Development (OECD)
(
2012
June
)
The structure of a country’s external liabilities, as well as the extent and nature of its international financial integration are key determinants of its vulnerability to financial crises. This is confirmed by new empirical analysis covering OECD and emerging economies over the past four decades.
Tags:
Macrofinancial stability measures
Capital flow management
Macroprudential policy coordination
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2012
June
)
This paper reviews some of the current debates on the reform of the international monetary system. Despite its deficiencies, the United States (US) dollar will remain the dominant currency and Special Drawing Rights (SDR) cannot serve as either an international medium of exchange or a reserve currency. The International Monetary Fund (IMF) has changed its position to accept capital controls under certain circumstances. Refining control instruments better tuned to present day markets may bring about greater acceptance.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2012
June
)
This paper discusses mechanisms to prevent and resolve foreign exchange crises in East Asia. Policies and mechanisms at the country level as well as regional and global levels are discussed. Policies at the level of a particular country to prevent foreign exchange crises include the management of short-term foreign currency liabilities, the adequacy of reserves, and managing episodes of rapid short-term capital inflows.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
East Asia
Working Paper
International Monetary Fund (IMF)
(
2012
June
)
What attracts conventional investors to Islamic financial instruments? This paper answers this question by comparing Malaysian Islamic and conventional security prices and their response to macrofinancial factors. The analysis suggests that Islamic and conventional bond and equity prices are driven by common factors. Likewise, especially in recent years, Islamic banks have responded to economic and financial shocks in the same way as conventional banks, suggesting that the gap between Islamic and conventional financial practices is shrinking.
Tags:
Regional financial cooperation and integration
Financial and capital market development
Scope:
Malaysia
Working Paper
Organisation for Economic Co-operations and Development (OECD)
(
2012
June
)
The global financial crisis of 2007-09 and the ensuing sovereign debt crisis in Europe provide evidence that portfolio rebalancing of financial investors can contribute to spread financial turmoil across countries. Rebalancing of portfolios, in turn, may be driven by the need to meet liquidity or capital requirements, or by sudden changes in investor sentiment.
Tags:
Macrofinancial stability measures
Capital flow management
Scope:
World
Discussion Paper
The Research Institute of Economy, Trade and Industry (REITI) Japan
(
2012
July
)
This study is an empirical attempt to investigate whether firms’ bond issues mitigate rent extraction by their banks. To that end, this paper focuses on the cash holdings of Japanese listed firms in the early 1980s, when Japanese banks used compensation balances as a device to extract rent from their client firms. Concretely, this study examines whether firms’ bond issues lead to a decrease in their cash holdings.
Tags:
Financial resilience and stability
Capital market
Public and private sector debt and leverage
Scope:
Japan
Working Paper
Asian Development Bank Institute (ADBI)
(
2012
July
)
As the world’s second largest economy, largest trading nation, and the largest foreign holder of United States (US) government bonds, the People’s Republic of China (PRC) needs a currency with international status that can match its economic status in the global economy. However, sequencing is important. Before the internationalization of the yuan can make meaningful progress, necessary conditions, such as the existence of deep and liquid financial markets, a flexible exchange rate and interest rates responsive to market conditions must be created.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Currency unions, intervention, and manipulation
Scope:
China, People's Republic of
Working Paper
International Monetary Fund (IMF)
(
2012
July
)
Over the past two decades, most emerging market economies witnessed two key developments. A marked process of financial integration with the rest of the world, arguably turning these economies more vulnerable to global financial shocks; and an improvement of macroeconomic fundamentals, helping to increase their resiliency to these shocks. Against a backdrop of these opposing forces, are these economies more vulnerable to global financial shocks today than in the past?
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Scope:
World
Working Paper
Peterson Institute for International Economics (PIIE)
(
2012
January
)
This paper aims to take stock of global efforts towards financial reform since the start of the financial crisis in 2007-08, and to provide a synthetic (if simplified) picture of their status as of January 2012. Underlying dynamics are described and analyzed both at the global level (particularly G-20, IMF, and FSB) and in individual jurisdictions, as well as the impact the crisis has had on these regions. The possible next steps of financial reform are then reviewed, including: the ongoing crisis management in Europe, the new emphasis on macroprudential approaches, the challenges posed by globally integrated financial firms, the implementation of harmonized global standards, and the links between financial systems and growth.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2012
January
)
The failure of regulation and the short-sightedness of the private sector were the root causes of the crisis. The balance of emphasis has shifted from encouraging innovation designed to yield short-term gains for a few to ensuring sustainable financial sector development that helps many. How can we make this new orientation operational? What does this enhanced regulation mean for growth and for equity? Are the implications of regulatory reforms different for emerging market economies (EMEs) whose growth momentum was dented by the crisis?
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Macrofinancial stability measures
Financial sector regulation
Scope:
World
Book
World Bank Group (WBG)
(
2012
January
)
The world economy has entered a dangerous period. Some of the financial turmoil in Europe has spread to developing and other high-income countries, which until earlier had been unaffected. This contagion has pushed up borrowing costs in many parts of the world, and pushed down stock markets, while capital flows to developing countries have fallen sharply.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Staff Paper
The South East Asian Central Banks (SEACEN)
(
2012
January
)
The global imbalances (current-account of BOP) refers to the large current account deficits of developed economies such as the United States and the large surpluses of developing economies such as the People's Republic of China and oil rich economies of the Middle East and the Russian Federation. In other words, global imbalances are inevitably viewed as the surplus net savings of the developing economies financing the consumption/investment of deficit developed economies.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Scope:
World
Working Paper
Asian Development Bank (ADB)
(
2012
January
)
This study identifies the key issues involved in the further development and deepening of financial markets in the Association of Southeast Asian Nations (ASEAN). For the smaller ASEAN countries, the first priority is the development of the banking system. In the larger ASEAN+3 economies, banking systems are already reasonably well-developed, while stock markets and government bond markets have evidently achieved critical mass even while remaining purely domestic markets.
Tags:
Regional financial cooperation and integration
Financial and capital market development
Scope:
Southeast Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2012
January
)
This paper analyzes the causes of the 2008-2009 financial crisis together with its manifestations, using a Multiple Indicator Multiple Cause (MIMIC) model. The analysis is conducted on a cross-section of 85 economies; it focuses on international financial linkages that may have both allowed the crisis to spread across economies, and/or provided insurance.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2012
January
)
The Bank for International Settlements (BIS) and the Bank of Japan (BOJ) jointly organized a high-level seminar on “The development of regional capital markets” in Yokohama, Japan, on 21-22 November 2011. The seminar brought together senior officials of 12 central banks in Asia and the Pacific, the European Central Bank, the Bank of Mexico, the Bank of England and the Federal Reserve Bank of New York, as well as an academic and a private sector participant.
Tags:
Financial resilience and stability
Capital market
Regional financial cooperation and integration
Financial and capital market development
Scope:
Asia
Working Paper
Asian Development Bank (ADB)
(
2012
February
)
Since the global financial crisis in 2008/09 there has been heightened concern about the resilience of banking systems in Southeast Asia. This paper proposes a methodology that uses a macroprudential perspective to assess the resilience of banking systems in member countries of the Association of Southeast Asian Nations.
Tags:
Financial resilience and stability
Scope:
Southeast Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2012
February
)
The debt crisis in several member states of the euro area has raised doubts on the viability of European Economic and Monetary Union (EMU) and the future of the euro. While the launch of the euro in 1999 stirred a lot of interest in regional monetary integration and even monetary unification in various parts of the world, including East Asia, the current crisis has had the opposite effect, even raising expectations of a breakup of the euro area.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
East Asia
Working Paper
International Labour Organization (ILO)
(
2012
February
)
Despite the high prevalence of vulnerable employment and working poverty in developing Asia, full employment is not a legislated objective of any central bank in the region. As this paper shows, however, many central banks are actively using monetary policy to promote productive employment, and they do appear concerned with labour market outcomes. By working closely with governments, central banks in developing Asia help to promote macroeconomic stability and strive for the goal of full employment.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2012
February
)
The increasing occurrence of national, regional, and global financial crises, together with their rising costs and complexity, have increased calls for greater regional and global monetary cooperation. This is particularly necessary in light of volatile capital flow movements that can quickly transmit crisis developments in individual countries to other countries around the world.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2012
February
)
By 2030, many Association of Southeast Asian Nations (ASEAN), People's Republic of China (PRC), and India (ACI) economies are expected to achieve developed economy status, and this will require a substantial contribution from the financial sector. The financial sector plays a number of key roles in the process of economic development and growth, including facilitating the trading of goods and services; evaluating investment projects; mobilizing and pooling savings to fund projects; transferring funds to where they are needed; monitoring the activities of capital users; distributing and monitoring risks; and providing investors with diverse savings products.
Tags:
Regional financial cooperation and integration
Financial and capital market development
Scope:
Southeast Asia
Working Paper
Bank for International Settlements (BIS)
(
2012
December
)
On 21-22 June 2012, the BIS held its Eleventh Annual Conference, on “The future of financial globalisation” in Lucerne, Switzerland. The event brought together senior representatives of central banks and academic institutions who exchanged views on this topic.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Regional financial cooperation and integration
Financial integration implications
Scope:
World
Book
Asian Development Bank (ADB)
(
2012
December
)
This book aims to identify and analyze the impact of the 2007-2009 global financial crisis on Asian economies and to assess the short-term and longer-term policy responses to the crisis in terms of their effectiveness and sustainability. The volume highlights that Asian economies have recovered strongly from the crisis, reflecting their aggressive moves to ease monetary and fiscal policy. However, the biggest challenge lies ahead. It asserts that, given that it is unlikely that the US and Europe will be engines of global growth, Asian economies should contribute to global economic adjustment by creating their own growth engines.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Financial resilience and stability
Risks arising from non-financial stressors
Financial stress in developing and emerging markets
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2012
December
)
Corporate bond issuers in emerging economies in Asia have often had a choice between an onshore market and an offshore one. Since 1998, however, many of these issuers have increasingly turned to the onshore market. This paper investigates systematically what factors have influenced this choice between markets for issuers in eight emerging economies - the People's Republic of China, Hong Kong, China, Indonesia, the Republic of Korea, Malaysia, the Philippines, Singapore and Thailand.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2012
August
)
A key lesson of the 2007-2009 global financial crisis (GFC) was the importance of containing systemic financial risk and the need for a “macroprudential” approach to surveillance and regulation that can identify system-wide risks and take appropriate actions to maintain financial stability. By virtue of their overview of the economy and the financial system and their responsibility for payments and settlement systems, there is a broad consensus that central banks should play a key role in monitoring and regulating financial stability.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
Asia
Working Paper
National Bureau of Economic Research (NBER)
(
2012
August
)
Recent academic papers have shown that the Japanese sovereign debt situation is not sustainable. The puzzle is that the bond rate has remained low and stable. Some suggest that the low yield can be explained by domestic residents’ willingness to hold Japanese government bonds (JGBs) despite its low return, and that as long as domestic residents remain home-biased, the JGBs are sustainable. About 95% of JGBs are currently owned by domestic residents. This paper argues that even with such dominance of domestic investors, if the amount of government debt breaches the ceiling imposed by the domestic private sector financial assets, the JGB rates can rapidly rise and the Japanese government can face difficulty rolling over the existing debt.
Tags:
Financial resilience and stability
Capital market
Public and private sector debt and leverage
Scope:
Japan
Working Paper
Asian Development Bank Institute (ADBI)
(
2012
August
)
The paper uses the emerging Association of Southeast Asian Nations (ASEAN) Economic Community as a motivation to explore the issue of capital flow management in an economic community. Although there is an increasingly shared view that capital flow management measures should be part of the routine policy toolkit of emerging market economies, the logic of an economic community appears incompatible with extensive controls on capital flows.
Tags:
Macrofinancial stability measures
Capital flow management
Scope:
Southeast Asia
Policy Paper
Peterson Institute for International Economics (PIIE)
(
2012
April
)
Active accommodation of fiscal consolidations by monetary policy is controversial, as can be seen in current euro area discussions. While many observers acknowledge that there is usually a place for monetary accommodation in response to fiscal consolidation, a sequencing argument is often heard today that fiscal commitment must precede any loosening.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2012
April
)
Asian central banks have adopted monetary policy frameworks over the past decade that have, by and large, worked well both to ensure price stability during the pre-crisis period and to navigate the shoals during the recent international financial crisis. Inflation concerns in recent years nonetheless raise the possibility that existing monetary policy frameworks in Asia may be contributing to procyclical inflation swings.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2012
April
)
This paper evaluates the extent of exchange rate coordination among Asian economies using a hypothetical Asian Currency Unit. Rising interdependence among Asian economies makes it vital for these economies to have a certain degree of exchange rate stability. However, the empirical evidence using an Asian Currency Unit suggests a widening deviation in exchange rate movements of the Asian currencies.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Regional financial cooperation and integration
Financial integration implications
Scope:
Asia
Research Paper
Munich Personal RePEc Archive (MPRA)
(
2012
April
)
The present paper aims to study the causal relationship between the US and Indian equity markets using Johansen’s cointegration and variance decomposition analyses. Since the opening up of the economy and subsequent economic and political reforms, India has made tremendous strides in the global equity markets and also been impinged on by the recent happenings.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Scope:
India
Working Paper
Bank for International Settlements (BIS)
(
2012
April
)
In the wake of the Asian financial crisis, many regimes in Asia adopted stricter provisioning requirements, as well as discretionary measures, with the objective of increasing provisioning in good times in response to rising levels of risk.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
Asia
Working Paper
Bank for International Settlements (BIS)
(
2012
April
)
Very low interest rates in major currencies have raised concerns over international credit flows to robustly growing economies in Asia. This paper examines three components of international credit and highlights several of the policy challenges that arise in constraining such credit. The empirical findings suggest that international credit enables domestic credit booms in emerging markets.
Tags:
Financial resilience and stability
Capital market
Public and private sector debt and leverage
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2011
September
)
Asian economic regionalism has emerged from a bottom-up process, driven by market forces in the absence of a grand plan for regional integration. While the financial crisis of 1997-98 triggered new regional cooperation initiatives, more recently several Asian political leaders have formulated proposals for the creation of a regional economic community, suggesting the possible start of a top-down approach.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2011
September
)
Reform of financial regulation is a priority on the international agenda. At the call of the Group of Twenty Finance Ministers and Central Bank Governors (G-20), a number of new international standards have been issued, most notably Basel III. As a member of the G-20, the Financial Stability Board (FSB), and the Basel Committee on Banking Supervision, the People’s Republic of China (PRC) is now on a faster track in adopting international standards. However, the key issue for the PRC - as well as many other emerging markets - is to how to keep focused on the domestic policy agenda while adopting the new global standards.
Tags:
Macrofinancial stability measures
Financial sector regulation
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
China, People's Republic of
Working Paper
Bank for International Settlements (BIS)
(
2011
September
)
At moderate levels, debt improves welfare and enhances growth. But high levels can be damaging. When does debt go from good to bad? We address this question using a new dataset that includes the level of government, non-financial corporate and household debt in 18 OECD countries from 1980 to 2010.
Tags:
Financial resilience and stability
Capital market
Public and private sector debt and leverage
Scope:
World
Working Paper
National Bureau of Economic Research (NBER)
(
2011
October
)
The paper investigates the relationship between economic growth and lagged international capital flows, disaggregated into FDI, portfolio investment, equity investment, and short-term debt. It follows about 100 countries during 1990-2010 when emerging markets became more integrated into the international financial system. It looks at the relationship both before and after the global crisis.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Scope:
World
Working Paper
International Monetary Fund (IMF)
(
2011
October
)
The paper shows that Asia’s degree of financial integration, both with the world and within the region remains low by various measures. The paper also provides empirical evidence that greater financial integration can support economic rebalancing in statistically meaningful ways. The implication is that in the debate on managing capital inflows the longer-term benefits of financial openness for broader-based growth should not be forgotten.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2011
October
)
The purpose of this paper is to reexamine the exchange rate policy of the Republic of Korea, and its role in promoting financial and monetary cooperation in East Asia in the wake of the 2008 global financial crisis. The Republic of Korea would not actively participate in any discussion of establishing a regional monetary and exchange rate arrangement as it is expected to maintain a weakly managed floating regime.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Foreign exchange market development
Scope:
East Asia
Working Paper
International Monetary Fund (IMF)
(
2011
October
)
This paper assesses financial integration in Asia in terms of risk-sharing benefit versus financial-contagion cost. We construct a new measure of risk sharing based on a term structure model, which allows identification of realized stochastic discount factors. Risk sharing is low in Asia, and varies across time and countries, whereas contagion risks are more significant intra-regionally, and relatively stable over the past decade. An overall tradeoff exists between risk sharing and contagion, but the terms of tradeoffs vary across countries, depending on relative economic fluctuations and inflation differentials. Asia, therefore, can potentially enhance risk sharing without raising contagion risk.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2011
October
)
This paper takes stock of recent research dealing with the degree to which the trilemma choices of Asian countries facilitated a smoother adjustment during the global crisis of 2008–2009, and the way the region has been coping with the adjustment to the postcrisis challenges.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Implications, lessons learned, and ways forward from financial crises
Scope:
Asia
Working Paper
Asian Development Bank (ADB)
(
2011
May
)
The central objective of this paper is to empirically evaluate the degree of linkages among East Asian equity and bond markets. The primary contribution of our paper to the empirical literature is that we use a financial gravity model grounded in economic theory.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
East Asia
Working Paper
Asian Development Bank (ADB)
(
2011
May
)
Using both quantity- and price-based measures of financial integration, this paper shows an increasing degree of financial openness and integration in emerging Asian markets. This paper also assesses the impact of a regional shock relative to a global shock on local equity and bond markets.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Regional financial cooperation and integration
Financial integration implications
Scope:
Asia
Working Paper
Bank for International Settlements (BIS)
(
2011
May
)
Global current account imbalances have been at the forefront of policy debates over the past few years. Many observers have recently singled them out as a key factor contributing to the global financial crisis. Current account surpluses in several emerging market economies are said to have helped fuel the credit booms and risk-taking in the major advanced deficit countries at the core of the crisis, by putting significant downward pressure on world interest rates and/or by simply financing the booms in those countries (the “excess saving” view).
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2011
May
)
The 2007-2010 financial crisis highlighted the central role of financial intermediaries’ stability in buttressing a smooth transmission of credit to borrowers. While results from the years prior to the crisis often cast doubts on the strength of the bank lending channel, recent evidence shows that bank-specific characteristics can have a large impact on the provision of credit.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Scope:
World
Working Paper
Bank of Japan (BoJ)
(
2011
May
)
Global commodity prices have been on an increasing trend since 2009, while their correlation with stock prices has risen. This paper attempts to identify the main causes of fluctuations in global commodity markets, by using the historical decomposition of VAR models.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2011
March
)
Is the harmonization of financial regulatory regimes possible in East Asia? Focusing on corporate governance, which many see as a critical part of the 1997 Asian financial crisis, and which is also seen as unresponsive to calls for change, this paper argues that such harmonization is possible, but that it will not be according to the “best practices” advocated by the International Monetary Fund, World Bank, Organisation for Economic Co-operation and Development, and other international organizations.
Tags:
Macrofinancial stability measures
Financial sector regulation
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
East Asia
Working Paper
Bank for International Settlements (BIS)
(
2011
March
)
We develop a measure of systemic importance that accounts for the extent to which a bank propagates shocks across the banking system and is vulnerable to propagated shocks. Based on Shapley values, this measure gauges the contribution of interconnected banks to systemic risk, in contrast to other measures proposed in the literature.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
World
Working Paper
National Bureau of Economic Research (NBER)
(
2011
March
)
In the recent financial crisis, macroeconomic stimuli produced mixed results across developed economies. In contrast, the People's Republic of China's stimulus boosted real GDP growth from an annualized 6.2% in the first quarter of 2009 trough to 11.9% in the first quarter of 2010. Amidst this phenomenal response, land auction and house prices in major cities soared. We argue that the speed and efficacy of the People's Republic of China's stimulus derives from state control over its banking system and corporate sector.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
China, People's Republic of
Working Paper
Asian Development Bank (ADB)
(
2011
June
)
This paper examines the extent to which economic crises facilitate the development of more effective regional institutions and whether such institutions can shield regions from crises. It compares six regional economic crises over the last four decades and the institution building - or decay - that followed.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2011
June
)
This paper provides an overview of the Reserve Bank of India’s approach to macroprudential regulation and systemic risk management, and reviews lessons drawn from the Indian experience. It emphasizes the need for harmonization of monetary policy and prudential objectives, which may not be possible if banking supervision is separated from central banks. It also notes that supervisors need to have the necessary independence and flexibility to act in a timely manner on the basis of available information. Macroprudential regulation is an inexact science with limitations and needs to be used in conjunction with other policies to be effective.
Tags:
Macrofinancial stability measures
Financial sector regulation
Macroprudential policy coordination
Scope:
India
Working Paper
Asian Development Bank Institute (ADBI)
(
2011
June
)
This paper discusses the increasingly important roles of Asian official institutions in the new global financial landscape and the reasons that have led to the build-up of massive public surpluses. We re-examine the role of sovereign wealth funds (SWFs) as the de facto “/1” during the recent financial crisis. Specifically, we analyze SWFs’ balance sheet characteristics, target allocations strategies, strategic agendas and political realities, management philosophies, and other real-world challenges, both before and after the crisis.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Regional financial cooperation and integration
Financial and capital market development
Scope:
Asia
Working Paper
Asian Development Bank (ADB)
(
2011
June
)
Feedback mechanisms are the key to sequencing when it comes to regional integration; can mean that today’s policy or institution alters the political-economy landscape in a way that makes it politically optimal for future governments to take further steps toward integration - even when these steps are not politically optimal from today’s perspective. After outlining the theory, the paper uses feedback mechanisms to organize Europe’s postwar integration narrative, and then draws lessons for today’s integration of East Asia.
Tags:
Regional financial cooperation and integration
Banking and capital market integration
Financial cooperation agreements and reforms
Financial integration implications
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2011
June
)
Several countries have employed countercyclical fiscal policy to ameliorate the impact of the global financial crisis. This study identifies some of the issues and policy implications associated with this policy response in developing countries. Included are case studies of four developing countries in the Asian region - Malaysia, Indonesia, the Philippines, and Singapore.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Indonesia
Malaysia
Philippines
Singapore
Working Paper
Asian Development Bank Institute (ADBI)
(
2011
June
)
The “decoupling” of East Asia from its economic interactions - both in trade and finance - with the rest of the world refers to the phenomenon of a weakening of the impact of demand and supply shocks emanating from the advanced countries on the region’s economic performance since the early 1990s. Available empirical evidence, including the faster recovery of East Asia from the 2008 global economic crisis, does not appear to lend credence to the decoupling thesis.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
East Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2011
July
)
One of the reasons behind the financial crisis in 1997 was excessive dependence of Asian economies on commercial banks for domestic financing. Banks were the major source of corporate financing because the other major source, bond markets, was underdeveloped and small. On the other hand, the 2008 global financial crisis led to constraints in acquiring local currency and foreign currency liquidity in the corporate sector, as foreign banks withdrew investments from Asia.
Tags:
Regional financial cooperation and integration
Financial and capital market development
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2011
July
)
Motivated by the unprecedented rise of swap agreements between the central banks of developed economies and their developing economy counterparts, this paper evaluates Asian swap arrangements and their association with the build-up of foreign reserves prior to the 2008-2009 global financial crisis. The evidence suggests that there is a limited scope for swaps to substitute for reserves.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Regional financial cooperation and integration
Banking and capital market integration
Cross-border bank financing
Scope:
Asia
Book
Asian Development Bank Institute (ADBI)
(
2011
July
)
In 2007, the U.S. sub-prime mortgage crisis drove investment banks and commercial banks into insolvency and ultimately sparked the biggest global financial crisis since the Great Depression. One of the biggest lessons from the crisis is that the market can be both an angel and a demon, and that government may be both a savior and a tyrant. We also learned that the U.S. or the E.U., which now make up less than 30% of the world economy, do not command the global economy on their own. Most of all, the diminishing faith in the financial industry has led to the failure of the internal balancing mechanisms of the world’s economies, which in turn has triggered the fall of financial capitalism.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Implications, lessons learned, and ways forward from financial crises
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2011
January
)
Pegging in a coordinated way to a regional basket currency is considered by many as optimal for east-Asian countries. By contrast, according to existing empirical studies, these countries have most often relied on noncooperative United States dollar or G3 pegs.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Currency unions, intervention, and manipulation
Scope:
East Asia
Working Paper
International Monetary Fund (IMF)
(
2011
January
)
The paper compares trends in financial integration within Asia with those in industrialized countries and other regional groups. Declines in cross-country dispersion in equity returns and interest rates suggest increased Asian integration, with the process interrupted by crises and global volatility.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2011
January
)
The recent financial crisis has shown that financial innovation can have devastating systemic impacts. International standard setters’ and national regulators’ response has been a global concerted effort to overhaul and tighten financial regulations. However, at a time of designing stricter regulations, it is crucial to avoid a backlash against financial inclusion.
Tags:
Financial inclusion
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2011
January
)
Recurrent capital inflows pose important challenges for authorities in emerging market economies seeking to preserve financial stability. Raising interest rates to dampen imbalances that could arise from capital flows can also attract more capital inflows and accentuate appreciation pressures. For this reason authorities have used a number of instruments to mitigate the effects of capital flows, all with financial stability implications.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2011
February
)
The recent financial crisis has highlighted the need to go beyond a purely micro approach to financial regulation and supervision. In recent months, the number of policy speeches, research papers and conferences that discuss a macro perspective on financial regulation has grown considerably. The policy debate is focusing in particular on macroprudential tools and their usage, their relationship with monetary policy, their implementation and their effectiveness.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Macrofinancial stability measures
Financial sector regulation
Macroprudential policy coordination
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2011
February
)
The paper analyzes the financial crisis of through the lens of market failures and regulatory failures. We present a case that there were four primary failures contributing to the crisis: excessive risk-taking in the financial sector due to mispriced government guarantees; regulatory focus on individual institution risk rather than systemic risk; opacity of positions in financial derivatives that produced externalities from individual firm failures; and runs on the unregulated banking sector that eventually threatened to bring down the entire financial sector.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Macrofinancial stability measures
Financial sector regulation
Scope:
World
Staff Paper
The South East Asian Central Banks (SEACEN)
(
2011
February
)
The subprime crisis had affected many economies, including those of the SEACEN region. Various measures to deal with both liquidity and solvency measures were taken by both the central banks and the relevant authorities. These included marrying micro- and macroprudential measures of financial stability. Past financial crises have also demonstrated that the fragility of the financial system and uncertainties may last for some time after the initial stage of the systemic financial crisis.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Working Paper
Peterson Institute for International Economics (PIIE)
(
2011
December
)
This paper addresses two central questions for Asia and the world: (1) What is the purpose of Asian regional policy coordination going forward? (2) Will Asian regional policy coordination substitute or complement global policy coordination? The paper examines the potential coverage and content of such policy coordination, what is meant by Asia in this context, and how Asia fits in with global policy coordination processes.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Asia
Working Paper
Bank for International Settlements (BIS)
(
2011
December
)
Since its launch in September 2006, the Asian Research Programme has focused on policy oriented studies for central banks and supervisory authorities in the Asia-Pacific region. Under the programme, the BIS Representative Office for Asia and the Pacific has co-organised a series of conferences, seminars and workshops with central banks and supervisory authorities in Asia and the Pacific. The subjects of interest have included improving monetary policy and operations, developing financial markets, maintaining financial stability and strengthening prudential policy.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Financial resilience and stability
Currency and foreign exchange market
Currency unions, intervention, and manipulation
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2011
December
)
Since the financial crises of 1997, East Asia has made modest but nonetheless significant steps towards greater regional integration and cooperation in the areas of finance and trade, accompanied by progress on institution-building at the regional level. Monetary cooperation, however, has not proceeded to anything like even the modest levels registered for other functional areas of cooperation. This paper investigates this discrepancy.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
East Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2011
December
)
This paper addresses the issue of international payments in a stock-flow framework, by capturing the interaction between the current account balance and international assets portfolios of domestic and foreign investors. It is argued that the stability of such interaction may be affected by shifts in the preferences of investors, by the relative rate of return of different assets, and - more in general - by institutional settings. The model is then used for policy analysis purposes to derive the conditions for the existence of dynamic equilibria, and if they can be attained, under the assumption of market-distorting policy choices.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2011
December
)
The adoption of quantitative easing (QE) policy by the United States (US) Federal Reserve Bank since early 2009 has aroused widespread concerns in Asia and elsewhere regarding its possible impact in terms of the weakening of the US dollar and stimulating capital outflows to emerging economies that might increase inflationary pressures in them. This report investigates possible impacts of US quantitative easing policy on Asian economies and financial markets.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2011
December
)
Capital controls and exchange restrictions are used to restrict international capital flows during economic crises. This paper looks at the legal implications of these restrictions and explores the current international regulatory framework applicable to international capital movements and current payments. It shows how international capital flows suffer from the lack of a comprehensive and coherent regulatory framework that would harmonize the patchwork of multilateral, regional, and bilateral treaties that currently regulate this issue.
Tags:
Macrofinancial stability measures
Capital flow management
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2011
August
)
This paper calculates the return on the major Asian currency denominated long-term government bonds in terms of a basket of the People’s Republic of China’s (PRC) imports of goods and services, namely the real return on those assets from the PRC’s perspective. In the sample period of January 2002 to December 2009, the real return on United States (US) treasury bills is lower than that of Japan, India, the Republic of Korea, Singapore, or Thailand’s government bonds, and a little higher than that of Malaysia’s government bonds.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
Asia
Working Paper
Bank for International Settlements (BIS)
(
2011
August
)
The macroeconomic performance of individual countries varied markedly during the 2007-09 global financial crisis. While the People's Republic of China's growth never dipped below 6% and Australia’s worst quarter was no growth, the economies of Japan, Mexico and the United Kingdom suffered annualised GDP contractions of 5-10% per quarter for five to seven quarters in a row. We exploit this cross-country variation to examine whether a country’s macroeconomic performance over this period was the result of pre-crisis policy decisions or just good luck.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2011
April
)
Regional monetary and financial cooperation in Asia has been discussed for years. To move towards a coordinated exchange rate policy, Ogawa and Shimizu (2005) proposed both an Asian Monetary Unit (AMU), which is a common currency basket computed as a weighted average of the thirteen ASEAN+3 currencies, and AMU Deviation Indicators (AMU DIs), which indicates the deviation of each Asian currency in terms of the AMU compared with the benchmark rate.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Currency unions, intervention, and manipulation
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2011
April
)
This paper considers the general equilibrium relationship between exchange rates and global imbalances. It emphasizes that the exchange rate is not a primitive but an equilibrium price determined by the policy mix.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2011
April
)
Crisis experience has shown that as the financial intermediation chain lengthens, it becomes complicated to assess the risks of financial products due to a lack of transparency as to how risks are managed at different levels of the intermediation chain. Exchange-traded funds, which have become popular among investors seeking exposure to a diversified portfolio of assets, share this characteristic, especially when their returns are replicated using derivative products. As the volume of such products grows, such replication strategies can lead to a build-up of systemic risks in the financial system. This article examines the operational frameworks of exchange-traded funds and identifies potential channels through which risks to financial stability can materialise
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Financial resilience and stability
Risks arising from non-financial stressors
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2010
September
)
The global economic and financial landscape has been transformed over the past decade by the growing economic size and financial power of emerging economies. The new G20 summit process, which includes the largest emerging economies, has established high level international policy cooperation in this new setting.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Asia
Working Paper
National Bureau of Economic Research (NBER)
(
2010
September
)
This paper evaluates how the global financial crisis emanating from the U.S. was transmitted to emerging markets. Our focus is on the extent that the crisis caused external market pressures (EMP), and whether the absorption of the shock was mainly through exchange rate depreciation or the loss of international reserves. Controlling for variety of factors associated with EMP, we find clear evidence that emerging markets with higher total foreign liabilities, including short- and long-term debt, equities, FDI and derivative products--had greater exposure and were much more vulnerable to the financial crisis.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Global and regional financial safety nets
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2010
September
)
This paper investigates the role that exchange rate changes can play in rebalancing transpacific trade. It presents evidence from a gravity model indicating that the exports from the People’s Republic of China (PRC) to the United States (US) are a key outlier in the global economy and that imbalances between the PRC and the US have remained large during the financial crisis that began in September 2008.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
World
Policy Brief
Asian Development Bank (ADB)
(
2010
September
)
The global financial crisis of 2008/09 has prompted a reassessment of financial regulation and supervision. Many note that regulatory changes in the global financial system inevitably slow financial innovation and economic growth. Will a wave of regulation and reform in the wake of the crisis also limit the ability of financial institutions to innovate? What are the likely implications for relatively underdeveloped emerging Asian economies?
Tags:
Macrofinancial stability measures
Financial sector regulation
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Asia
Staff Paper
The South East Asian Central Banks (SEACEN)
(
2010
October
)
The study brings into light the evidence of a fundamental role of the Chinese renminbi in shaping the exchange rate behaviour of other major Asian currencies. The results obtained suggest that there is an additional dimension to the ‘fear of appreciation’ or ‘fear of floating-in-reverse’ behaviour, initially coined by Levy-yeyati and Sturzenegger (2007) with regard to these major Asian currencies.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
Asia
Working Paper
National Bureau of Economic Research (NBER)
(
2010
October
)
This paper provides an overview of the complex conceptual and practical challenges that emerging market economies face as they attempt to reform their frameworks for financial regulation. These economies are striving to balance the quest for financial stability with the imperatives of financial development and broader financial inclusion.
Tags:
Macrofinancial stability measures
Financial sector regulation
Scope:
World
Staff Paper
International Monetary Fund (IMF)
(
2010
October
)
Three years after the onset of the global financial crisis, much has been done to reform the global financial system, but there is much left to accomplish. The regulatory reform agenda agreed by G-20 leaders in 2009 has elevated the discussions to the highest policy level and kept international attention focused on establishing a globally consistent set of rules.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2010
November
)
Using a dynamic global general equilibrium model, the paper assesses the short- and medium-term impacts of the global financial crisis on Asian economies and the implications of post-crisis adjustment in emerging East Asia (EEA) for the world economy. The analysis suggests that EEA is unlikely to be severely damaged permanently by the global financial crisis, and a worldwide fiscal stimulus could play an important role in stabilizing the global economy in crisis.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Scope:
Asia
Working Paper
Bank for International Settlements (BIS)
(
2010
November
)
On 24-25 June 2010, the BIS held its Ninth Annual Conference, on “The future of central banking under post-crisis mandates” in Lucerne, Switzerland. The event brought together senior representatives of central banks and academic institutions who exchanged views on this topic.
Tags:
Macrofinancial stability measures
Financial sector regulation
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2010
November
)
This paper investigates the impact of CDS trading on the development of the bond market in Asia. In general, CDS trading has lowered the cost of issuing bonds and enhanced the liquidity in the bond market. The positive impact is stronger for smaller firms, non-financial firms and those firms with higher liquidity in the CDS market.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Scope:
Asia
Book
Asian Development Bank (ADB)
(
2010
May
)
Global economic and financial conditions have improved over the past year in part due to the unprecedented policy measures taken in response to the global financial crisis. As a result of the improving external environment and swift policy responses of the region's governments, emerging Asia's economic recovery has gained substantial traction.
Tags:
Regional financial cooperation and integration
Financial integration implications
Scope:
Asia
Working Paper
European Central Bank (ECB)
(
2010
May
)
This paper empirically models the People's Republic of China's stock prices using conventional fundamentals: corporate earnings, risk-free interest rate, and a proxy for equity risk premium. It uses the estimated longeron stock price misalignments to date booms and busts, and analyses equity market reforms and excess liquidity as potential drivers of these stock price misalignments.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Scope:
China, People's Republic of
Working Paper
Bank for International Settlements (BIS)
(
2010
May
)
The financial crisis that began in August 2007 has blurred the sharp distinction between monetary and financial stability. It has also led to a revival of practical central bank co-operation. This paper explains how things have changed.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Scope:
World
Working Paper
European Central Bank (ECB)
(
2010
May
)
In the New-Keynesian model, optimal interest rate policy under uncertainty is formulated without reference to monetary aggregates as long as certain standard assumptions on the distributions of unobservables are satisfied. The model has been criticized for failing to explain common trends in money growth and inflation, and that therefore money should be used as a cross-check in policy formulation (see Lucas (2007)). This paper shows that the New-Keynesian model can explain such trends if one allows for the possibility of persistent central bank misperception.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Discussion Paper
The Research Institute of Economy, Trade and Industry (REITI) Japan
(
2010
May
)
This paper analyzes how much deviation we have among Asian currencies, which include the Indian rupee, the Australian dollar, and the New Zealand dollar, given that the East Asian Community is discussed based on ASEAN+3 (Japan, the People's Republic of China, and the Republic of Korea)+3 (India, Australia, and New Zealand). The paper investigates whether intra-regional exchange rates increase in instability or deviation when the additional three countries (India, Australia, and New Zealand) join the ASEAN+3.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Regional financial cooperation and integration
Financial integration implications
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2010
March
)
This paper examines capital account openness and exchange rate flexibility in 11 Asian economies. Asia has made slow progress in de jure capital account openness, but has made much more progress in de facto capital account openness.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
Asia
Working Paper
Bank of England (BOE)
(
2010
March
)
This paper develops an analytical model of contagion in financial networks with arbitrary structure. It explores how the probability and potential impact of contagion is influenced by aggregate and idiosyncratic shocks, changes in network structure, and asset market liquidity.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2010
March
)
Securitization was meant to disperse credit risk to those who were better able to bear it. In practice, securitization appears to have concentrated the risks in the financial intermediary sector itself. This paper outlines an accounting framework for the financial system for assessing the impact of securitization on financial stability.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Scope:
World
Policy Brief
United Nations Conference on Trade and Development (UNCTAD)
(
2010
March
)
Amidst continued financial crisis, the question of the global trade imbalances is back high on the international agenda. A procession of prominent economists, editorialists and politicians have taken it upon themselves to “remind” the surplus countries, and in particular the country with the biggest surplus, the People's Republic of China, of their responsibility for a sound and balanced global recovery.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Implications, lessons learned, and ways forward from financial crises
Scope:
World
Working Paper
Bank of England (BOE)
(
2010
March
)
This paper develops a model for monetary policy analysis that features significant feedback from asset prices to macroeconomic quantities. The feedback is caused by credit market imperfections, which dynamically affect how efficiently labour and capital are being used in aggregate. It then analyses what implications this mechanism has for monetary policy.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Working Paper
National Bureau of Economic Research (NBER)
(
2010
March
)
Developing Asia experienced a sharp surge in foreign currency reserves prior to the 2008-9 crisis. The global crisis has been associated with an unprecedented rise of swap agreements between central banks of larger economies and their counterparts in smaller economies. This paper explores whether such swap lines can reduce the need for reserve accumulation.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Global and regional financial safety nets
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
Asia
Book
Bank for International Settlements (BIS)
(
2010
March
)
This volume contains four papers presented at the BIS-sponsored sessions at the 2008 and 2009 annual meetings of LACEA. Written by leading central bankers and distinguished academics, they address the challenges confronted in recent years by central banks that practice inflation targeting (IT) and issues arising from the global crisis.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2010
March
)
It is widely believed that the practice of securitization is one of the causes that led to the 2007-08 financial crisis. This paper shows that securitized products such as collateralized debt obligations (CDO) are particularly vulnerable to systematic risk and tend to show higher tail risk.
Tags:
Financial resilience and stability
Risks arising from non-financial stressors
Macrofinancial stability measures
Financial sector regulation
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2010
March
)
Since the start of the financial crisis, industrial country public debt levels have increased dramatically. And they are set to continue rising for the foreseeable future. A number of countries face the prospect of large and rising future costs related to the ageing of their populations. In this paper, we examine what current fiscal policy and expected future age related spending imply for the path of debt/GDP ratios over the next several decades.
Tags:
Financial resilience and stability
Capital market
Public and private sector debt and leverage
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2010
June
)
The conventional view is that microeconomic reforms after the 1997-98 Asian financial crisis have greatly strengthened banking systems in Asia. Banks have become better capitalised, external exposures have been reduced and credit risk has been managed more effectively. But this conventional view does not take enough account of the macroeconomic background.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Asia
Working Paper
Bank for International Settlements (BIS)
(
2010
June
)
The impact of currency collapses (i.e. large nominal depreciations or devaluations) on real output remains unsettled in the empirical macroeconomic literature. This paper provides new empirical evidence on this relationship using a dataset for 108 emerging and developing economies for the period 1960-2006. It provides estimates of how these episodes affect growth and output trend.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Currency unions, intervention, and manipulation
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2010
June
)
The Japanese government’s response to the financial crisis in the 1990s was late, unprepared and insufficient; it failed to recognize the severity of the crisis, which developed slowly; faced no major domestic or external constraints; and lacked an adequate legal framework for bank resolution. Policy measures adopted after the 1997–1998 systemic crisis, supported by a newly established comprehensive framework for bank resolution, were more decisive.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Implications, lessons learned, and ways forward from financial crises
Scope:
Japan
Book
Asian Development Bank (ADB)
(
2010
June
)
The financial crash of 2008 and subsequent global economic downturn has led to a major reassessment of the global monetary and financial system. When the crisis broke, both advanced and emerging economies resorted to frenetic macroeconomic measures to avert financial catastrophe and assure global confidence in the international financial system could return. These globally coordinated policies may have contributed to the ensuing worldwide recovery. But what is needed now is a better regulatory environment that reduces the probability it could happen again.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Global and regional financial safety nets
Scope:
Asia
Staff Paper
The South East Asian Central Banks (SEACEN)
(
2010
June
)
The primary objective of this study is to examine the evidence of occurrences of extreme market pressure of currencies of a number of Asian economies against the US dollar during the period of 2000-2009. In particular, we are interested in investigating the severity of these pressures during the recent US sub-prime crisis of 2007-2009.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
Asia
Working Paper
Asian Development Bank (ADB)
(
2010
July
)
This paper examines the nexus between capital flows and real exchange rate (RER) in emerging Asian countries using a dynamic panel-data model for 2000-2009. In contrast to previous studies, capital flows here are separated into foreign direct investment (FDI), portfolio investment, and other investment (bank loans) flows.
Tags:
Financial resilience and stability
Capital market
Capital flow stability and volatility
Scope:
Asia
Working Paper
Bank for International Settlements (BIS)
(
2010
July
)
Funding liquidity risk has played a key role in all historical banking crises. Nevertheless, a measure based on publicly available data remains so far elusive. This paper addresses this gap by showing that aggressive bidding at central bank auctions reveals funding liquidity risk.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Working Paper
Asian Development Bank (ADB)
(
2010
July
)
It would be easy to say that central banks should consider asset prices as one of the objectives to avoid boom and bust cycles, as happened in the 2007-2009 crisis; the dotcom bubble of 2001; and the Japanese boom and bust of the 1980s and 1990s. However, its implementation would be theoretically and empirically difficult since the monetary policy instrument, narrowly defined, is just the interest rate. Flexible inflation targeting (FIT) is basically a sound monetary policy framework even after experiencing a severe financial crisis, as what originated in the United States.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2010
July
)
This paper discusses the Chiang Mai Initiative Multilateralization (CMIM); its origin, development and future outlook. It puts forward a number of proposals to make the liquidity support role of the CMIM more effective. It is further argued that the CMIM can bring about major changes to the policy institutional infrastructure of the East Asia region, particularly through the establishment of an Independent Surveillance Unit (ISU).
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Asia
Working Paper
Bank for International Settlements (BIS)
(
2010
July
)
This paper studies the nature of spillover effects in bank lending flows from advanced to the emerging market economies and identifies specific channels through which such effects occur. Based on a gravity model, the paper examines a panel data set on cross-border bank flows from 17 advanced to 28 emerging market economies in Asia, Latin America and central and eastern Europe from 1993 to 2008.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2010
January
)
This paper extends the approach of measuring and stress-testing the systemic risk of a banking sector in Huang, Zhou, and Zhu (2009) to identifying various sources of financial instability and to allocating systemic risk to individual financial institutions. The systemic risk measure, defined as the insurance cost to protect against distressed losses in a banking system, is a summary indicator of market perceived risk that reflects expected default risk of individual banks, risk premia as well as correlated defaults.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
World
Working Paper
Stockholm School of Economics
(
2010
January
)
This paper analyzes equity market movements in East Asia and Europe during the global financial crisis. Extending the methodology in Chakrabarti and Roll (2002), the paper studies regional as well as country-regional volatility, covariance and correlation. It also analyzes regional and country-regional tail dependence in the two regions. The results show that volatility and covariance patterns in East Asia and Europe were relatively stable until the second half of 2008.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Scope:
East Asia
Working Paper
Bank for International Settlements (BIS)
(
2010
January
)
Regionalism has become a prominent feature of the global trading system for several years now, partly because of the relatively slower pace by which multilateral trade negotiations have been conducted under the General Agreement on Tariffs and Trade (GATT)/World Trade Organization (WTO). The recent proliferation of regional trade agreements (RTAs) and other forms of regional cooperation, triggered by the European Union (EU) market integration which has so far been the most successful example of regional economic integration, has drawn attention to the need of countries to strengthen their ties with other countries given the economic benefits that regional integration brings.
Tags:
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
Southeast Asia
Staff Paper
International Monetary Fund (IMF)
(
2010
February
)
With the global economy beginning to emerge from the financial crisis, capital is flowing back to emerging market economies (EMEs). These flows, and capital mobility more generally, allow countries with limited savings to attract financing for productive investment projects, foster the diversification of investment risk, promote intertemporal trade, and contribute to the development of financial markets. In this sense, the benefits from a free flow of capital across borders are similar to the benefits from free trade, and imposing restrictions on capital mobility means foregoing, at least in part, these benefits, owing to the distortions and resource misallocation that controls give rise to.
Tags:
Macrofinancial stability measures
Capital flow management
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2010
February
)
This paper reviews the use of precautionary measures aimed at mitigating emerging markets’ exposure to fragility associated with financial integration. The discussion draws possible lessons from the ongoing global liquidity crisis. The fear of losing international reserves (IR) constrained most emerging markets more than the fear of floating.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Global and regional financial safety nets
Implications, lessons learned, and ways forward from financial crises
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2010
February
)
Monetary policy frameworks in the Asia and Pacific region have performed well in the past decade as judged by inflation outcomes. This paper argues that this is due to three principal factors: (i) central banks have focused on price stability as the primary objective of monetary policy, (ii) institutional setups have been put in place that are supportive of the central banks’ abilities to carry out their objectives, and (iii) economic policies in general have been supportive of the pursuit of price stability, in particular the adoption of prudent fiscal policies that have reduced concerns of fiscal dominance.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2010
February
)
The ongoing global economic crisis has punished Asian economies severely, despite the fact that its origins derive from outside the region. The global economic crisis was transmitted through real and financial channels, underscoring how vulnerable the region is to external shocks. This paper explores the microeconomic origins of the financial crisis and endeavors to ascertain how crises might be mitigated in the future through better regulation, supervision, and institution-building. Moreover, it makes the case for closer economic cooperation in order to internalize key externalities associated with modern global finance.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Macrofinancial stability measures
Financial sector regulation
Scope:
Asia
Working Paper
Bank for International Settlements (BIS)
(
2010
February
)
A central proposition in research on the role that banks play in the transmission mechanism is that monetary policy imparts a direct impact on deposits and that deposits, insofar as they constitute the supply of loanable funds, act as the driving force of bank lending. This paper argues that the emphasis on policy-induced changes in deposits is misplaced.
Tags:
Macrofinancial stability measures
Macroprudential policy coordination
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2010
February
)
How much can regional monitoring of financial markets and coordination of financial sector policies contribute to preventing and mitigating financial crises? This paper reviews and compares the experiences of Europe and Asia, which have taken different routes and have achieved different levels of regional financial integration.
Tags:
Macrofinancial stability measures
Financial sector regulation
Regional financial cooperation and integration
Financial cooperation agreements and reforms
Scope:
World
Working Paper
Asian Development Bank (ADB)
(
2010
February
)
The financial crisis, initially traced to subprime mortgage market in the United States (US) and the resulting deleveraging process by global financial institutions involved in highly complex financial transactions, marks the first global financial crisis of the 21st century. Few countries linked to the global financial markets and international trade were spared from the sudden downturn as the financial system imploded in September 2008.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Scope:
Asia
Working Paper
Asian Development Bank (ADB)
(
2010
February
)
In South Asia, India and Sri Lanka were affected most by the global economic crisis. They initially responded to the supply shock by a combination of fiscal and monetary policies to mitigate the impact and support economic growth. Bangladesh and Sri Lanka took narrower targeted fiscal stimulus measures, but India adopted more across-the-board fiscal stimulus to support economic growth. The differences in the fiscal and monetary policy stance reflect the impact of the crisis, the assessment of the downturn, and the availability of fiscal space.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Implications, lessons learned, and ways forward from financial crises
Scope:
South Asia
Working Paper
Asian Development Bank Institute (ADBI)
(
2010
December
)
This paper seeks to add to the current debate about financial development and growth in the emerging world by looking at how different financial systems evolve: how and why financial structures change during various stages of development, how best to measure them, and seeing what practical policy lessons can be drawn from historical experience.
Tags:
Regional financial cooperation and integration
Financial and capital market development
Scope:
World
Working Paper
Bank for International Settlements (BIS)
(
2010
December
)
Emerging market economies (EMEs) were significantly affected by the global financial crisis. Nevertheless, compared with their experience in previous crises, EMEs displayed remarkable resilience, maintaining robust rates of growth even as the crisis unfolded in advanced economies starting around mid-2007, and containing disruptions to financial markets so as to avoid experiencing crises themselves.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Implications, lessons learned, and ways forward from financial crises
Scope:
World
Working Paper
Asian Development Bank Institute (ADBI)
(
2010
August
)
The present analysis sheds light on the setting up a regional rating agency in Asia in the wake of recent financial crisis. This paper investigate the policy facing a financial regulator while evaluating whether or not to admit new entrants into the credit rating market.
Tags:
Macrofinancial stability measures
Financial sector regulation
Scope:
Asia
Staff Paper
The South East Asian Central Banks (SEACEN)
(
2010
August
)
This paper demonstrates that the economies of Indonesia, the Republic of Korea, Philippines and Thailand, which are among the first group of emerging markets to embrace the inflation targeting framework of monetary policy, tend to adopt a form of an asymmetrical exchange rate behaviour wherein appreciation pressures are restrained more substantially than depreciation pressures.
Tags:
Financial resilience and stability
Currency and foreign exchange market
Exchange rate stability and volatility
Scope:
Indonesia
Korea, Republic of
Philippines
Thailand
Working Paper
Asian Development Bank Institute (ADBI)
(
2010
April
)
This paper extends our previous paper (Aizenman, Chinn, and Ito 2008) and explores some of the unexplored questions. First, it examines the channels through which the trilemma policy configurations affect output volatility. Secondly, it investigates how trilemma policy configurations affect the output performance of the economies under severe crisis situations. Thirdly, it looks into how trilemma configurations have evolved in the aftermath of economic crises in the past.
Tags:
Economic and financial crisis, regional contagion, and spillovers
Financial stress, contagion, and early warning system
Implications, lessons learned, and ways forward from financial crises
Scope:
World