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After seven successful workshops, the organizing committee of this small informal workshop invites submissions of high-quality theoretical and empirical research on financial intermediation. Scholars in the fields of banking and finance will meet to discuss current issues in banking, financial stability, and financial regulation, focusing on policy reforms for a stable global financial environment. The workshop will provide an opportunity for presentations and discussions about policy-relevant research in an informal and highly interactive environment.

Mikael Homanen, 15 October 2018

Bank creditors have non-financial preferences too, and may withdraw deposits as a form of discipline. This column shows that protests against the Dakota Access Pipeline that targeted investor banks caused significant decreases in deposit growth, and global data suggest that this type of reaction to bank-specific scandals is widespread.

Jose A. Lopez, Andrew Rose, Mark Spiegel, 02 October 2018

Many countries have now adopted negative nominal interest rates. The column uses data on 5,000 banks affected by this policy to conclude that, while their net income has not fallen, strategies to increase non-interest income are unlikely to be sustainable. Therefore we cannot assume that bank performance and lending will carry on at current levels over extended periods of negative policy rates.

Richard Thakor, Robert Merton, 21 August 2018

Trust in financial products and institutions is widely recognised as being essential for financial markets to function efficiently. This column argues that trust in financial institutions may have a first-order impact on whether non-bank (fintech) firms can survive when competing against traditional banks. When trust is lost and reputation becomes important, the cost of funding rises more for fintech firms than for banks, as financiers see that banks have a stronger reputational incentive to make good loans. So while banks may be able to survive a loss of trust, fintech lenders will be forced to shut down.

Antonio Cabrales, 07 June 2018

The Great Moderation was characterised by a period of risk-pooling. Antonio Cabrales discusses his research on the socially optimal design of financial networks for tackling the trade-off between risk sharing and contagion. When firms face heterogeneous distributions of risks, they should optimally form linkages only with firms facing risks of the same kind.

Thorsten Beck, 12 April 2018

Anat Admati, 29 March 2018

Nearly a year on from the Global Crisis, many argue that the international banking system remains broken. Anat Admati discusses how the structure of banks makes them fragile, and why they should be regulated in order to withstand shocks. 

Thorsten Beck, Consuelo Silva-Buston, Wolf Wagner, 13 March 2018

International cooperation on bank supervision is still rare. This column analyses data on supervisory cooperation among a global sample of countries between 1995 and 2013 to show that cooperation among bank supervisors is not always optimal. Country pairs with higher cross-border externalities and lower heterogeneity are more likely to cooperate, and in more intense ways, but for some country pairs the costs of cooperation outweigh the benefits.

Jonathan Eaton, 09 March 2018

The sovereign debt crisis no doubt heavily impacted the Euro Area as it ran its course, but its longer-term implications for the evolution of Europe remain unclear. Jonathan Eaton discusses some of the similarities and differences between the sovereign debt problems of the 1970s-80s and today, and their implications for the future. This video was published by the ADEMU Project in November 2016.

Marco Onado, 01 March 2018

The Global Crisis continues to cast a show over Europe in the form of the persistent weakness of its financial systems. In this video, Marco Onado discusses the role of non-performing loans (NPLs) in causing these weaknesses, and suggests how they could be resolved using a form of securitisation that imposes limited costs on both the banks and public finance. This video was recorded at the RELTIF book launch held in London in January 2018.

Stephen Cecchetti, Kim Schoenholtz, 22 February 2018

Investment is shifting from tangible physical assets to intangible goods like software, data, and R&D. This column analyses the impact of this shift on the structure of firm financing. The financial system’s shift from public to private equity is, on the whole, an encouraging reflection of its response to the changing needs of the economy.

Andrea Polo, 12 February 2018

European banks have responded in different ways to monetary interventions in the last few years. In this video, Andrea Polo discusses the central role monetary policy has taken in Europe, along with its limitations. While the ECB has created substantial liquidity through quantitative easing, these large injections of liquidity may not have been fully passed on to the real economy. This video was recorded at the RELTIF book launch held in London in January 2018.

Martin Brown, Ioanna S Evangelou, Helmut Stix, 01 February 2018

A cornerstone of new bank resolution policies across the world is the introduction of bail-ins to redistribute the costs of bank failures from taxpayers to bank creditors. This column uses the bail-in of two banks in Cyprus to examine how bank depositors react to this way of resolving a crisis. In the short run, customers who experienced deposit or bond bail-ins increased their holdings of cash and reduced deposits, while those who faced only an equity bail-in did not change their behaviour. In the medium run, confidence in the banking system among all depositors remained low.

Gauti Eggertsson, Ragnar Juelsrud, Ella Getz Wold, 31 January 2018

Economists disagree on the macroeconomic role of negative interest rates. This column describes how, due to an apparent zero lower bound on deposit rates, negative policy rates have so far had very limited impact on the deposit rates faced by households and firms, and this lower bound on the deposit rate seems to be causing a decline in pass-through to lending rates as well. Negative interest rates thus appear ineffective in stimulating aggregate demand.

Stefan Avdjiev, Bilyana Bogdanova, Patrick Bolton, Wei Jiang, Anastasia Kartasheva, 22 December 2017

The promise of contingent convertible capital securities as a bail-in solution has been the subject of considerable theoretical analysis and debate, but little is known about their effects in practice. This column reviews the results of the first comprehensive empirical analysis of bank CoCo issues. Among other things, it finds that the propensity to issue a CoCo is higher for larger and better-capitalised banks, and that their issue result in statistically significant declines in issuers' CDS spreads, indicating that they generate risk-reduction benefits and lower the costs of debt.

Thomas Huertas, 03 November 2017

What does the future of banks and financial institutions look like? In this video, Thomas Huertas talks about the regulatory environment and advances in technology. This video was recorded at the "10 years after the crisis" conference held in London, on 22 September 2017.

Thorsten Beck, 24 April 2017

Nine years after the onset of the Global Crisis, the problem of non-performing assets is still acute in the Eurozone. This column takes stock of the different proposals to deal with the issue. It argues that a Eurozone-level asset management company can resolve bank fragility and spur economic recovery, but warns that lack of political will and legal barriers can impede the creation of such an agency. 

Marco Onado, 21 February 2017

European banks have not recovered from the Global Crisis, in part due to heavy provisions for non-performing loans. This column argues that a comprehensive approach to the issue in Europe could address market inefficiencies and reduce bad loans to bearable levels. The establishment of a European scheme to securitise non-performing loans should form one of the next steps towards recovery.

Kristin Forbes, Dennis Reinhardt, Tomasz Wieladek, 23 December 2016

Globalisation is in retreat, but while the slowdown in trade is widely recognised, what is more striking is the collapse of global capital flows. This column shows how banking deglobalisation is a substantial contributor to the sharp slowdown in global capital flows. It finds that certain types of unconventional monetary policy, and their interactions with regulatory policy, can have important global spillovers. Policies designed to support domestic lending may have had the unintended consequence of amplifying the impact of microprudential capital requirements on external lending.

Claudia Buch, Matthieu Bussière, Linda Goldberg, 09 December 2016

The Global Crisis has triggered substantive policy responses, but assessing the impacts of these and the effects on the real economy is a challenging task. This column discusses the work of the International Banking Research Network in examining international spillovers of prudential instruments through credit provision by banks. It finds that prudential instruments sometimes spill over across borders through bank lending, and that international spillovers vary across prudential instruments and are heterogeneous across banks. There appears to be no one channel or even direction of transmission that dominates spillovers.

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