Jon Danielsson, Andreas Tsanakas, 18 March 2016

Macroprudential policy has become increasingly popular in the aftermath of the Global Crisis, but it remains controversial. This column argues that vigorous disagreement is both inevitable and healthy, reflecting differing fundamental views of how the financial system really works. By embracing the divergence of views instead of seeing it as problematic, macroprudential policymaking will be made easier and more effective.  

Çağatay Bircan, Ralph De Haas, Hans Peter Lankes, Alexander Plekhanov, 10 November 2015

In the wake of the Global Crisis, emerging Europe has experienced a sharp drop in investment levels. As a result, income convergence has virtually come to a halt. This column presents key findings of the EBRD’s latest Transition Report, urging countries in emerging Europe to rebalance their financial systems in order to reignite economic growth. Rebalancing is necessary in terms of the available debt–equity mix, the currency composition of credit, banks’ funding sources, and cross-border investment partners.

Minouche Shafik, 05 October 2015

We need a strong and resilient global financial safety net to reduce the systemic implications of sovereign crises and allow nations to cope with shocks in order to reap the economic rewards of an integrated system of trade and finance. This column argues that the current arrangements are suboptimal – resembling more of a patchwork than a safety net. Drawing on the experience of central banks during the financial crisis, it offers preliminary policy proposals to enhance the effectiveness of the global financial safety net.

Dirk Schoenmaker, 30 August 2014

In the aftermath of the financial crisis, governments have been reducing their potential exposures to the banking system. This column argues that a fiscal backstop remains necessary for a banking system, contrary to what many policymakers claim. The main reason is that private arrangements may not be sufficient in a severe crisis. Without a credible backstop, depositors will run on a troubled banking system.

Thorsten Beck, Hans Degryse, Christiane Kneer, 08 April 2013

Growing the financial sector was viewed as a viable 21st-century competitiveness policy for small, agile nations in the 2000s. Things have changed. This column reviews the empirical literature arguing for a distinction between two roles: finance as intermediation or facilitator, and finance as a growth sector in itself. Evidence suggests that, for rich nations, finance stimulates growth but makes it more volatile, whereas for developing nations its function as a facilitator raises long-term growth and reduces volatility.

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