Research
Finnish paper presents two explanations for eurozone weakness
Paper looks at fall in natural interest rate and output rate shocks
Build-up of public debt causes longer recessions for EMs – paper
“Less supportive” fiscal policy makes emerging markets more prone to problems associated with accumulation of public debt; authors highlight the importance of fiscal buffers
French paper examines impact of ECB’s PSPP on bond yields
Researchers use data from the French market to examine bond shocks
Hysteresis can explain eurozone peculiarities – Eichengreen and Bayoumi
Eurozone has not responded to shocks in the way economic theory would normally imply, with the German economy tied surprisingly closely to those of ‘peripheral’ countries
HK researchers ask how much markets affect RMB fixing
Researchers test China’s assertion the exchange rate is now determined more by markets, finding mixed evidence
Successful bank nationalisations need trust in government, paper argues
DNB paper looks at effects of government intervention on bank customers’ behaviour
Norges Bank paper offers method of stress testing with fire sales
Model recognises possibility of indirect exposures, which could affect outcome of bank stress tests
Third of businesses think investment has been ‘too low’ – BoE survey
Bank of England publishes results of survey of UK firms in latest quarterly bulletin; businesses experienced both real economy and financial “obstacles” to investment
BoE research offers insights from new regulatory database
The new database, comprising banks’ regulatory submissions, allows authors to shed new light on the evolution of the UK banking sector in recent decades
New factors driving EM corporate leverage – RBI paper
Changed macroeconomic backdrop has taken over from firm-specific factors in driving the build-up of corporate leverage in emerging markets, RBI economist finds
Encouraging creation of ‘quasi-safe assets’ may be destabilising, paper argues
Investors have distinct “safety demand”, researchers argue
Policy intervention helps economies escape ‘stagnation traps’ – paper
Research published by ECB explains how “pessimistic expectations” can lead to low employment and growth, dampening investment; countercyclical subsidies could be the answer
IMF research uncovers ‘puzzling’ effect of QE on the current account
Authors see QE having significant impact only when capital mobility is low; findings suggest “unexplained variation” between QE and capital mobility
Spanish paper proposes new measures for economic recoveries
Researchers apply new tests to data on US post-war expansions
RBNZ paper sets out new house price indexes
Improved dataset allows design of three new indexes, all of which produce “credible-looking” outcomes
IMF authors examine conditions for structural reform success
Most labour and product market reforms strengthen medium-term output and fiscal sustainability, but they may be painful to implement in some parts of the cycle
Foreign bank branches show more volatile lending – Norges Bank commentary
Foreign branches may be subject to lower capital requirements, giving them a competitive edge but also making their lending growth more volatile
Central banks’ liquidity injections may amplify bank runs, paper argues
ESRB paper looks at 2008 US crisis using simple model of bank runs
IMF paper offers new ways of measuring capital flow volatility
Authors say more granular dataset and three different methods of calculating capital flow volatility allow them to gain new insights
Loan-to-credit ratios affected stability of smaller German banks – paper
Bundesbank researchers look at data on “critical events” from 1995 to 2013
BIS authors spot structural break in bank financing
Research identifies turning point in how banks fund themselves around 2008, with greater reliance on branches and subsidiaries
EU stress tests should revise banking income assumptions, ECB paper argues
Fee and commission income likely to decrease more under “adverse” scenario, researchers say
BoE paper isolates loan supply impact of credit crunch
“Rich, tailor-made data set” informs study of how pre-crisis bank lending characteristics may have impacted post-crisis credit supply
ECB paper models effects of bank guarantees
Guarantees improve welfare by increasing liquidity transformation, researchers find