The Effectiveness Of Central Bank Interventions During The First Phase Of The Subprime Crisis
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| Author | : Mr.Heiko Hesse |
| Publisher | : International Monetary Fund |
| Total Pages | : 30 |
| Release | : 2009-09-01 |
| Genre | : Business & Economics |
| ISBN | : 1451873530 |
This paper provides evidence that central bank interventions had a statistically significant impact on easing stress in unsecured interbank markets during the first phase of the subprime crisis which began in July 2007. Extraordinary liquidity provisions, such as the Term Auction Facility by the Federal Reserve, are analyzed. First a decomposition of the Libor-OIS spread indicates that credit premia increased in importance as the crisis deepened. Second, using Markov switching models, central bank operations are then graphically associated with reductions in term funding stress. Finally, bivariate VAR and GARCH models are adopted to econometrically quantified these impacts. While helpful in compressing Libor spreads, the economic magnitudes of central interventions have overall not been very large.
| Author | : Romain Lafarguette |
| Publisher | : International Monetary Fund |
| Total Pages | : 33 |
| Release | : 2021-02-12 |
| Genre | : Business & Economics |
| ISBN | : 1513569406 |
This paper presents a rule for foreign exchange interventions (FXI), designed to preserve financial stability in floating exchange rate arrangements. The FXI rule addresses a market failure: the absence of hedging solution for tail exchange rate risk in the market (i.e. high volatility). Market impairment or overshoot of exchange rate between two equilibria could generate high volatility and threaten financial stability due to unhedged exposure to exchange rate risk in the economy. The rule uses the concept of Value at Risk (VaR) to define FXI triggers. While it provides to the market a hedge against tail risk, the rule allows the exchange rate to smoothly adjust to new equilibria. In addition, the rule is budget neutral over the medium term, encourages a prudent risk management in the market, and is more resilient to speculative attacks than other rules, such as fixed-volatility rules. The empirical methodology is backtested on Banco Mexico’s FXIs data between 2008 and 2016.
| Author | : Board of Governors of the Federal Reserve System |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2002 |
| Genre | : Banks and Banking |
| ISBN | : 9780894991967 |
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 | : Nathaniel Frank |
| Publisher | : |
| Total Pages | : 34 |
| Release | : 2009 |
| Genre | : Banks and banking, Central |
| ISBN | : |
| Author | : Carl-Johan Lindgren |
| Publisher | : |
| Total Pages | : 103 |
| Release | : 1999 |
| Genre | : Business & Economics |
| ISBN | : 9781557758712 |
An IMF paper reviewing the policy responses of Indonesia, Korea and Thailand to the 1997 Asian crisis, comparing the actions of these three countries with those of Malaysia and the Philippines. Although all judgements are still tentative, important lessons can be learned from the experiences of the last two years.
| Author | : International Monetary Fund |
| Publisher | : International Monetary Fund |
| Total Pages | : 45 |
| Release | : 2014-06-11 |
| Genre | : Business & Economics |
| ISBN | : 1498342620 |
This note provides guidance to facilitate the staff’s advice on macroprudential policy in Fund surveillance. It elaborates on the principles set out in the “Key Aspects of Macroprudential Policy,” taking into account the work of international standard setters as well as the evolving country experience with macroprudential policy. The main note is accompanied by supplements offering Detailed Guidance on Instruments and Considerations for Low Income Countries
| Author | : Mr.Luis Ignacio Jácome |
| Publisher | : International Monetary Fund |
| Total Pages | : 57 |
| Release | : 2015-03-17 |
| Genre | : Business & Economics |
| ISBN | : 1484303180 |
This paper provides a brief historical journey of central banking in Latin America to shed light on the debate about monetary policy in the post-global financial crisis period. The paper distinguishes three periods in Latin America’s central bank history: the early years, when central banks endorsed the gold standard and coped with the collapse of this monetary system; a second period, in which central banks turned into development banks under the aegis of governments at the expense of increasing inflation; and the “golden years,” when central banks succeeded in preserving price stability in an environment of political independence. The paper concludes by cautioning against overburdening central banks in Latin America with multiple mandates as this could end up undermining their hard-won monetary policy credibility.
| Author | : Mr.Stijn Claessens |
| Publisher | : International Monetary Fund |
| Total Pages | : 66 |
| Release | : 2013-01-30 |
| Genre | : Business & Economics |
| ISBN | : 1475561008 |
This paper reviews the literature on financial crises focusing on three specific aspects. First, what are the main factors explaining financial crises? Since many theories on the sources of financial crises highlight the importance of sharp fluctuations in asset and credit markets, the paper briefly reviews theoretical and empirical studies on developments in these markets around financial crises. Second, what are the major types of financial crises? The paper focuses on the main theoretical and empirical explanations of four types of financial crises—currency crises, sudden stops, debt crises, and banking crises—and presents a survey of the literature that attempts to identify these episodes. Third, what are the real and financial sector implications of crises? The paper briefly reviews the short- and medium-run implications of crises for the real economy and financial sector. It concludes with a summary of the main lessons from the literature and future research directions.
| Author | : David Archer |
| Publisher | : |
| Total Pages | : 90 |
| Release | : 2013 |
| Genre | : |
| ISBN | : 9789291979318 |
| Author | : International Monetary Fund. Monetary and Capital Markets Department |
| Publisher | : International Monetary Fund |
| Total Pages | : 160 |
| Release | : 2013-04-17 |
| Genre | : Business & Economics |
| ISBN | : 1475589581 |
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.
