Financial crisis
Greek debt deal marks start of rough road
Negotiations on Friday ended in a compromise stacked in Germany’s favour; although disaster has been temporarily averted there are more battles to come, and Greece’s funding remains tight
BoE research finds high-frequency trading makes prices more efficient
High-frequency trading, although correlated, appears to be based on information and therefore helps markets form prices efficiently, working paper finds
More reforms needed to tackle CCP risks, warns IMF paper
Significant risks remain despite efforts to improve the resilience of central counterparties, IMF working paper warns; direct access to central bank facilities would help
NBER paper finds shareholder protection dampens crises
Stock markets provide emergency source of funding during banking crises, and the shock-absorbing effect is stronger if shareholders are better protected, working paper finds
Bank of Canada research underscores need for securitisation reform
Working paper warns asymmetric information impairs market functioning and means risk-sharing is not enough to efficiently allocate securitisations
Greek crisis meeting gets go-ahead despite German challenge
A meeting of the Eurogroup will take place Friday after Greece yesterday sought a six-month bailout extension, but Germany has moved quickly to challenge the proposed compromise
IMF too sluggish to be global lender of last resort, say Allen and Moessner
The IMF’s response to the financial crisis was too weak and too late, leaving the Federal Reserve to pick up the slack, William Allen and Richhild Moessner argue in the Central Banking Journal
Evaluating the IMF’s performance in the financial crisis
The results of the IMF’s Independent Evaluation Office investigation into the Fund’s handling of the global financial crisis are deeply flawed.
Book notes: Don’t start from here, by David Shirreff
A pointed, passionate plea for a simpler banking system that deserves to be taken seriously
Book notes: European Spring, by Philippe Legrain
Ambitious and accessible, this book's take on events is provocative and its alternative insights warrant reflection
Growth of finance sucks skill from real economy, BIS paper warns
Financial growth crowds out real growth by drawing skilled labour away from other industries, with R&D hit particularly hard, a working paper by Stephen Cecchetti and Enisse Kharroubi finds
BIS paper asks why bank and central bank rates diverged post-crisis
Authors argue direct comparison of commercial and central bank interest rates is misleading; the relationship between the two has remained stable but funding costs have risen
FOMC members too bullish on growth, researchers at San Francisco Fed say
‘Persistent overoptimism' about future growth since financial crisis may be due to overestimation of monetary policy efficacy following a balance-sheet recession, authors find
BCBS paper reviews how accounting may fuel crises
Basel Committee paper surveys research into how accounting rules may have contributed to financial crisis, with implications for the design of disclosure rules
Research finds IMF lending helps limit future crises
Working paper published by IMF examines impact of lending programmes on developing countries between 1970 and 2010, finding they reduce likelihood of future banking crises
Eichengreen says central banks should worry more about deflation than 'profits and losses'
The Berkeley professor on what last week's SNB move says about big central banks 'wrong-footing' markets and the Fed's problematic response to financial crisis
Productivity performance sparks uptick in US entrepreneurship, finds Boston Fed paper
‘Modest improvement' in 2012 and 2013 follows a 'significant decline' in firm creation after the financial crisis to the lowest level since 1977
NY Fed's Baxter targets stronger ethical culture in banks
Thomas Baxter says progress is more important than ‘perfection' in promoting better behaviour among financial industry workers
King says further easing unlikely to work
Former Bank of England governor warns monetary policy is reaching the limit of its ability to stimulate, with the global economy trapped in ‘quite serious disequilibria’
Bundesbank paper: German banks use specific loan loss provisions counter-cyclically
Banks increase level of loan loss provisions during upswings and decrease them during downturns, authors find; contrasts with results from other countries
BoJ paper outlines enhancements to flow of funds data
Review paper details improvements to flow of funds accounts statistics in Japan introduced since the global financial crisis, and identifies a number of trends that have emerged
BoE wartime minutes show sharp contrast between Court of then and now
Minutes from 1914-1946 show an evolving Court of Directors, but one radically different from today; the latest release covers both World Wars and the Great Depression
BoE’s crisis Court minutes reveal fractious relationships inside and out
Minutes of 2007-2009 meetings reveal efforts by Bank of England executives to circumvent the Court, as well as ‘strained’ relationship with other regulators
Pent-up wage cuts an 'important force' during recovery, San Francisco Fed researchers find
Many firms were unable to reduce wages during the recession, and the 'pent-up' reductions have influenced the recovery, argue authors