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Author: Mr.Giovanni Dell'Ariccia Publisher: International Monetary Fund ISBN: 1484381130 Category : Business & Economics Languages : en Pages : 41
Book Description
We present evidence of a risk-taking channel of monetary policy for the U.S. banking system. We use confidential data on the internal ratings of U.S. banks on loans to businesses over the period 1997 to 2011 from the Federal Reserve’s survey of terms of business lending. We find that ex-ante risk taking by banks (as measured by the risk rating of the bank’s loan portfolio) is negatively associated with increases in short-term policy interest rates. This relationship is less pronounced for banks with relatively low capital or during periods when banks’ capital erodes, such as episodes of financial and economic distress. These results contribute to the ongoing debate on the role of monetary policy in financial stability and suggest that monetary policy has a bearing on the riskiness of banks and financial stability more generally.
Author: Mr.Giovanni Dell'Ariccia Publisher: International Monetary Fund ISBN: 1484381130 Category : Business & Economics Languages : en Pages : 41
Book Description
We present evidence of a risk-taking channel of monetary policy for the U.S. banking system. We use confidential data on the internal ratings of U.S. banks on loans to businesses over the period 1997 to 2011 from the Federal Reserve’s survey of terms of business lending. We find that ex-ante risk taking by banks (as measured by the risk rating of the bank’s loan portfolio) is negatively associated with increases in short-term policy interest rates. This relationship is less pronounced for banks with relatively low capital or during periods when banks’ capital erodes, such as episodes of financial and economic distress. These results contribute to the ongoing debate on the role of monetary policy in financial stability and suggest that monetary policy has a bearing on the riskiness of banks and financial stability more generally.
Author: Ms.TengTeng Xu Publisher: International Monetary Fund ISBN: 1484393805 Category : Business & Economics Languages : en Pages : 54
Book Description
We analyze how bank profitability impacts financial stability from both theoretical and empirical perspectives. We first develop a theoretical model of the relationship between bank profitability and financial stability by exploring the role of non-interest income and retail-oriented business models. We then conduct panel regression analysis to examine the empirical determinants of bank risks and profitability, and how the level and the source of bank profitability affect risks for 431 publicly traded banks (U.S., advanced Europe, and GSIBs) from 2004 to 2017. Results reveal that profitability is negatively associated with both a bank’s contribution to systemic risk and its idiosyncratic risk, and an over-reliance on non-interest income, wholesale funding and leverage is associated with higher risks. Low competition is associated with low idiosyncratic risk but a high contribution to systemic risk. Lastly, the problem loans ratio and the cost-to-income ratio are found to be key factors that influence bank profitability. The paper’s findings suggest that policy makers should strive to better understand the source of bank profitability, especially where there is an over-reliance on market-based non-interest income, leverage, and wholesale funding.
Author: Tobias Adrian Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
In a recently released New York Fed staff report, we present a forward-looking monitoring program to identify and track time-varying sources of systemic risk.
Author: Board of Governors of the Federal Reserve System Publisher: ISBN: 9780894991967 Category : Banks and Banking Languages : en Pages : 0
Book Description
Provides an in-depth overview of the Federal Reserve System, including information about monetary policy and the economy, the Federal Reserve in the international sphere, supervision and regulation, consumer and community affairs and services offered by Reserve Banks. Contains several appendixes, including a brief explanation of Federal Reserve regulations, a glossary of terms, and a list of additional publications.
Author: Mr.Fabian Valencia Publisher: International Monetary Fund ISBN: 1463923236 Category : Business & Economics Languages : en Pages : 39
Book Description
This paper develops a model to assess how monetary policy rates affect bank risk-taking. In the model, a reduction in the risk-free rate increases lending profitability by reducing funding costs and increasing the surplus the monopolistic bank extracts from borrowers. Under limited liability, this increased profitability affects only upside returns, inducing the bank to take excessive leverage and hence risk. Excessive risk-taking increases as the interest rate decreases. At a broader level, the model illustrates how a benign macroeconomic environment can lead to excessive risk-taking, and thus it highlights a role for macroprudential regulation.
Author: International Monetary Fund. Monetary and Capital Markets Department Publisher: International Monetary Fund ISBN: 1475589581 Category : Business & Economics Languages : en Pages : 160
Book Description
The Global Financial Stability Report examines current risks facing the global financial system and policy actions that may mitigate these. It analyzes the key challenges facing financial and nonfinancial firms as they continue to repair their balance sheets. Chapter 2 takes a closer look at whether sovereign credit default swaps markets are good indicators of sovereign credit risk. Chapter 3 examines unconventional monetary policy in some depth, including the policies pursued by the Federal Reserve, the Bank of England, the Bank of Japan, the European Central Bank, and the U.S. Federal Reserve.
Author: Ross P. Buckley Publisher: Cambridge University Press ISBN: 1107100933 Category : Business & Economics Languages : en Pages : 485
Book Description
Taking stock of the 2008 global financial crisis, this book provides 'outside the box' solutions for reforming international financial regulation.
Author: International Monetary Fund. Monetary and Capital Markets Department Publisher: International Monetary Fund ISBN: 1498324029 Category : Business & Economics Languages : en Pages : 109
Book Description
The October 2019 Global Financial Stability Report (GFSR) identifies the current key vulnerabilities in the global financial system as the rise in corporate debt burdens, increasing holdings of riskier and more illiquid assets by institutional investors, and growing reliance on external borrowing by emerging and frontier market economies. The report proposes that policymakers mitigate these risks through stricter supervisory and macroprudential oversight of firms, strengthened oversight and disclosure for institutional investors, and the implementation of prudent sovereign debt management practices and frameworks for emerging and frontier market economies.
Author: International Monetary Fund. Monetary and Capital Markets Department Publisher: International Monetary Fund ISBN: 1616352477 Category : Business & Economics Languages : en Pages : 94
Book Description
The April 2012 Global Financial Stability Report assesses changes in risks to financial stability over the past six months, focusing on sovereign vulnerabilities, risks stemming from private sector deleveraging, and assessing the continued resilience of emerging markets. The report probes the implications of recent reforms in the financial system for market perception of safe assets, and investigates the growing public and private costs of increased longevity risk from aging populations.
Author: Mr.Giovanni Dell'Ariccia
Author: Mr.Giovanni Dell'Ariccia
Author: Mr.Jeremy Clift
Author: Ms.TengTeng Xu
Author: Tobias Adrian
Author: Board of Governors of the Federal Reserve System
Author: Mr.Fabian Valencia
Author: International Monetary Fund. Monetary and Capital Markets Department
Author: Ross P. Buckley
Author: International Monetary Fund. Monetary and Capital Markets Department
Author: International Monetary Fund. Monetary and Capital Markets Department