The resilience of the international status of the US dollar remains surprising (Frankel 2013). At the peak of the global financial crisis which started in the US, in particular in the last quarter of 2008, US treasury yields fell and the US dollar appreciated. This has created the impression of a stronger demand for US securities in general.
Foreign investors and crises: There is no safe haven for all seasons
Maurizio Michael Habib, Livio Stracca, 28 February 2014
How did the Global Financial Crisis misalign East Asian currencies?
Eiji Ogawa, Zhiqian Wang, 19 January 2014
Some East Asian countries experienced a serious currency crisis in 1997. The crisis was blamed on both the de facto US dollar peg system and double mismatches of domestic financial institutions’ balance sheets in terms of currency and maturity. Following the Asian currency crisis, recognition of the importance of regional monetary cooperation has steadily grown.
Why fiscal sustainability matters
Willem Buiter, 10 January 2014
Does fiscal sustainability matter only when there is a fiscal house on fire, as was the case with the Greek sovereign insolvency in 2011–12? Far from it.
Topics: Financial markets, Global crisis, International finance, Macroeconomic policy
Tags: balance-sheet recession, banking, banking union, banks, capital flows, credit booms, Currency wars, emerging markets, eurozone, Eurozone crisis, financial crisis, fiscal policy, fiscal sustainability, global financial crisis, sovereign debt, sovereign debt restructuring
Gambling for resurrection in Iceland
Friðrik Már Baldursson, Richard Portes, 6 January 2014
The demise of the three large Icelandic banks, just after the fall of Lehman Brothers, was a key event in the spread of the financial crisis. A couple of weeks before its collapse in October 2008, Kaupthing bank announced that the Qatari investor Sheikh Mohammed Bin Khalifa Bin Hamad al-Thani had bought a 5.01% stake. This briefly boosted market confidence in Kaupthing (Financial Times 2008).
Bank capital requirements: Risk weights you cannot trust and the implications for Basel III
Jens Hagendorff, Francesco Vallascas, 16 December 2013
One of the primary purposes of bank capital is to absorb losses. Where bank capital holdings are insufficient to absorb losses, banks will either fail or – if bank failure is deemed too costly for the economy – be bailed out. In practice, banks frequently receive public funds where capital holdings are insufficient to cover losses in order to prevent bank failure.
Smart governance: solutions for today’s global economy
Nemat Shafik, 14 December 2013
Making the case for smart governance
Global economic crises tend to reignite discussions of global governance and international cooperation. This is because crises lay bare the shortcomings of existing international rules and institutions. The recent crisis has been no different.
Growth, real exchange rates, and trade protectionism since the financial crisis
Georgios Georgiades, Johannes Gräb, 8 December 2013
The sharp global economic downturn in 2008-09 and the protracted weakness of the global economy have nurtured fears that governments might resort to trade protectionism in order to support their economies by sheltering them from foreign competition.
Political Credit Cycles: The Case of the Euro Zone
Jesús Fernández-Villaverde, Luis Garicano, Tano Santos, 24 March 2013
Vox readers can download CEPR Discussion Paper 9404 for free here.
Is the Federal Reserve breeding the next financial crisis?
Ambrogio Cesa-Bianchi, Alessandro Rebucci, 11 April 2013
According to many economists, monetary policy played a central role in exacerbating the severity of the global financial crisis of 2007-09.
International capital flows during crises: Gross matters
Fernando A Broner, Tatiana Didier, Aitor Erce, Sergio Schmukler, 28 March 2013
The financial crises of the last three decades have spurred interest in the dynamics of international capital flows. Most of the work on the topic has focused on the behaviour of net capital flows, namely the difference between the foreign purchases of domestic assets (or capital inflows by foreigners) and the domestic purchases of foreign assets (or capital outflows by domestic agents).
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