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International Settlement

The Bank for International Settlements (BIS) is an international company limited by shares owned by central banks which "fosters international monetary and financial cooperation and serves as a bank for central banks". The BIS carries out its work through subcommittees, the secretariats it hosts and through an annual general meeting of all member banks. It also provides banking services, but only to central banks and other international organizations. It is based in Basel, Switzerland, with representative offices in Hong Kong and Mexico City.

Articles by International Settlement

A discussion paper on central counterparty default management auctions

11 days ago

CPMI Papers
 | 
No 185
 | 
05 June 2019

PDF full text (385kb)
 | 
30 pages

Central counterparties (CCPs) have become increasingly critical components of the financial system in recent years, due in part to the introduction of mandatory clearing for standardised OTC derivatives in some jurisdictions. Consistent with the key responsibility of guaranteeing the fulfilment of transactions to their clearing participants, CCPs play an important role in mitigating contagion in the event of a participant default. A default management auction is one of the tools that a CCP may use to transfer a defaulting

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Industry heterogeneity and exchange rate pass-through

12 days ago

BIS Working Papers
 | 
No 787
 | 
04 June 2019

by 

Camila Casas

PDF full text (866kb)
 | 
65 pages

Summary
Focus
I analyse the relationship at the industry level between the exchange rate pass-through to export and import prices and volumes and the use of imported inputs in production.
Contribution
This paper contributes to the literature on incomplete pass-through and its determinants. Specifically, I focus on the role of imported inputs in determining trade prices and volumes, for both exports and imports. I analyse two separate sources of heterogeneity in the effects of imported inputs:

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Estimating the effect of exchange rate changes on total exports

12 days ago

BIS Working Papers
 | 
No 786
 | 
04 June 2019

by 

Thierry Mayer and

Walter Steingress

PDF full text (5,408kb)
 | 
43 pages

Summary
Focus
Reduced form models that explain total exports with real effective exchange rates (REERs) are widely used in applied policy work, but their analytical structures are only loosely based on international trade theory. Incorrect aggregation of theory-consistent bilateral trade equations implies that estimations performed on aggregate data lead to bias in the underlying elasticties. Models calibrated with these elasticities will have predictions at odds

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Effects of a mandatory local currency pricing law on the exchange rate pass-through

12 days ago

BIS Working Papers
 | 
No 785
 | 
04 June 2019

by 

Renzo Castellares and

Hiroshi Toma

PDF full text (698kb)
 | 
37 pages

Summary
Focus
This paper discusses whether Law 28300 of 2004, which required Peruvian firms to express their prices in the Peruvian currency in a context of high price dollarisation, affected the exchange rate pass-through (ERPT).
Contribution
The paper is the first study of the impact on the ERPT of the 2004 law on local currency pricing, whose enactment represents a unique natural experiment. 
Findings
Using disaggregated consumer price index data and price

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Import prices and invoice currency: evidence from Chile

12 days ago

BIS Working Papers
 | 
No 784
 | 
04 June 2019

by 

Fernando Giuliano and

Emiliano Luttini

PDF full text (706kb)
 | 
42 pages

Summary
Focus
We study the exchange rate pass-through to import prices at the dock using detailed customs data for Chile. We quantify the contribution of the invoice currency vis-à-vis the exporter’s currency in determining the exchange rate pass-through at different time horizons.
Contribution
A depreciation of a country’s currency results in more expensive imports, which ultimately trickles down to retail prices. This study is motivated by a related concern on

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BIS Quarterly Review, June 2019

12 days ago

BIS Quarterly Review
 | 
04 June 2019

PDF full text (1,128kb)
 | 
71 pages
 | 
ePub

The June issue contains only information related to BIS statistics, notably the BIS Statistical Bulletin; relevant material on financial developments will be included in the Annual Economic Report 2019 to be published on 30 June 2019.

Contents
International banking and financial market developments
Quarterly Review boxes

Statistical data
BIS Statistics: Charts
Data behind all graphs
BIS Statistical

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Implementation monitoring of PFMI: Assessment report for the United States – Payment systems, central securities depositories and securities settlement systems

16 days ago

CPMI Papers
 | 
No 184
 | 
31 May 2019

PDF full text (387kb)
 | 
33 pages

The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) closely monitor the implementation of the Principles for financial market infrastructures (PFMI). This report presents the conclusions drawn by the CPMI and IOSCO from a Level 2 assessment of whether, and to what degree, the legal, regulatory and oversight frameworks for systemically important payment systems (PSs), central security depositories (CSDs) and securities settlement systems (SSSs) in the

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The use of big data analytics and artificial intelligence in central banking

19 days ago

IFC Bulletin
 | 
No 50
 | 
28 May 2019

PDF full text (65,040kb)
 | 
970 pages

Proceedings of the IFC – Bank Indonesia International Workshop and Seminar on Big Data in Bali, 23-26 July 2018.

Conference overview

The use of big data analytics and artificial intelligence in central banking – An overview

Authors: 

Bruno Tissot,

Anggraini Widjanarti,

Alvin Andhika Zulen,

Hidayah Dhini Ari and

Okiriza Wibisono

pdf version (520kb)

Opening remarks

Building pathways for policy

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Dominant currency debt

May 17, 2019

BIS Working Papers
 | 
No 783
 | 
17 May 2019

by 
Egemen Eren and
Semyon Malamud

PDF full text (774kb)
 | 
96 pages

Summary
Focus
The US dollar is the most common currency of choice for debt contracts. Dollar-denominated credit to non-banks outside the United States amounts to around $11.5 trillion. While the dominance of the dollar declined prior to 2008, the currency has strengthened its international role since then.
We develop a model to study how a dominant currency emerges. Guided by our results, we show empirically why it is the dollar, and why the

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How does the interaction of macroprudential and monetary policies affect cross-border bank lending?

May 15, 2019

BIS Working Papers
 | 
No 782
 | 
15 May 2019

by 
Előd Takáts and
Judit Temesvary

PDF full text (666kb)
 | 
42 pages

Summary
Focus
Central banks increasingly use macroprudential tools. These tools interact with monetary policy in affecting credit supply and thereby the economy. Yet studying this interaction is difficult, because monetary policy and macroprudential tools work in a similar way and address similar objectives.
Contribution
Our main contribution is to identify the interaction of monetary and macroprudential policies in international bank

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Sixteenth progress report on adoption of the Basel regulatory framework

May 7, 2019

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

Fifteenth progress report on adoption of the Basel regulatory framework

26 Oct 2018

Type:  Implementation reports

Status:  Superseded

This version

BCBS
 | 

Implementation reports

 | 
07 May 2019
 |

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Asia-Pacific fixed income markets: evolving structure, participation and pricing

April 26, 2019

BIS Papers
 | 
No 102
 | 
26 April 2019

PDF full text (2,724kb)
 | 
163 pages

The Bank of Korea and the Bank for International Settlements (BIS) co-hosted a conference on "Asia-Pacific fixed income markets: evolving structure, participation and pricing" on 19-20 November 2018 in Seoul, Korea. The conference marked the completion of the BIS Asian Office’s two-year research programme on fixed income markets that had been endorsed by the Asian Consultative Council of central bank Governors in May 2017.
The conference brought together senior officials and researchers from central

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New information and inflation expectations among firms

April 18, 2019

BIS Working Papers
 | 
No 781
 | 
18 April 2019

by 
Serafin Frache and
Rodrigo Lluberas

PDF full text (1,270kb)
 | 
45 pages

Summary
Focus
We study how firms form inflation expectations in an environment of relatively high and volatile inflation, as is the case of many developing economies. This is in contrast to previous studies that focus on developed countries.
Contribution
Survey data on firms’ inflation expectations are scarce, despite the role of firms as price setters. We first provide evidence on how firms form their inflation expectations and how

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Can regulation on loan-loss-provisions for credit risk affect the mortgage market? Evidence from administrative data in Chile

April 18, 2019

BIS Working Papers
 | 
No 780
 | 
18 April 2019

by 
Mauricio Calani

PDF full text (1,033kb)
 | 
35 pages

Summary
Focus
How is mortgage credit affected by macroprudential regulation? We look at how a change in regulation affecting loan loss provisions for mortgage credit risk affected the Chilean mortgage credit market.
Contribution
A growing body of literature has established that macroprudential policies subdue fast growth of mortgage credit and house prices. Most of those analyses have relied on cross-country data, but cross-country average effects are not

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Consolidated Basel Framework

April 9, 2019

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

Minimum standards for the supervision of international banking groups and their cross-border establishments

28 Jul 1992

Type:  Standards

Status:  Superseded

Basel III: Finalising post-crisis reforms

7 Dec 2017

Type:  Standards

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Standardised approach – implementing the mapping process

April 9, 2019

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

This version

BCBS
 | 

Guidelines

 | 
09 April 2019
 | 

Status:  Current

PDF full text (144kb)
 | 
6 pages

Topics:
Credit risk

This document set out guidelines for supervisors in the process of assigning the credit risk assessments of an eligible external credit assessment institution (ECAI) to the risk weights available under the standardised approach to credit risk.

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BigTech and the changing structure of financial intermediation

April 8, 2019

BIS Working Papers
 | 
No 779
 | 
08 April 2019

by 
Jon Frost,
Leonardo Gambacorta,
Yi Huang,
Hyun Song Shin and
Pablo Zbinden

PDF full text (1,219kb)
 | 
45 pages

Summary
Focus
This paper investigates the entry of big technology companies (BigTech) into financial services. It seeks to address three questions: What economic forces are driving this development? Do BigTech lenders have an information advantage compared with traditional data or processing methods, particularly when gauging creditworthiness? Do firms receiving BigTech credit perform differently from

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Does informality facilitate inflation stability?

April 5, 2019

BIS Working Papers
 | 
No 778
 | 
05 April 2019

by 
Enrique Alberola-Ila and
Carlos Urrutia

PDF full text (877kb)
 | 
42 pages

Summary
Focus
The paper assesses how informality affects inflation dynamics and monetary policy. Informality is captured by a dual labour market where the share of informal workers is driven by market demand and adjusts quickly. Only formal sector firms have access to financing, which is necessary for their production process. These elements are embedded in a standard general equilibrium framework with a Taylor rule for monetary policy. We explore the impact of

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Towards a sectoral application of the countercyclical capital buffer

April 3, 2019

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

This version

BCBS
 | 

Working papers

 | 
03 April 2019
 | 

Status:  Current

PDF full text (314kb)
 | 
25 pages

Topics:
Macroprudential / systemic importance,
Credit risk

In May 2017, the Basel Committee’s Research Task Force initiated a work stream on sectoral countercyclical capital buffers (CCyBs). It was tasked to produce two deliverables that would contribute to the understanding of the sectoral application of the CCyB:

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What anchors for the natural rate of interest?

March 26, 2019

BIS Working Papers
 | 
No 777
 | 
26 March 2019

by 
Claudio Borio,
Piti Disyatat and
Phurichai Rungcharoenkitkul

PDF full text (1,650kb)
 | 
54 pages

Summary
Focus
We examine the prevailing view that only saving and investment drivers influence the long-term evolution of real, or inflation-adjusted, interest rates. That view also relies on the notion of a natural, or equilibrium, real interest rate that is independent of monetary policy. By contrast, we argue that monetary factors matter.
Contribution
We test the role of saving and investment drivers based on a large set of

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Basel III Monitoring Report

March 20, 2019

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

Basel III Monitoring Report

4 Oct 2018

Type:  QIS

Status:  Superseded

This version

BCBS
 | 

QIS

 | 
20 March 2019
 | 

Status:  Current

PDF full text (4,507kb)
 | 
173 pages

Topics:
QIS – Quantitative Impact Study

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Can an ageing workforce explain low inflation?

March 20, 2019

BIS Working Papers
 | 
No 776
 | 
20 March 2019

by 
Benoit Mojon and
Xavier Ragot

PDF full text (832kb)
 | 
24 pages

Summary
Focus
How do we explain low inflation? Inflation has remained low in many advanced economies in spite of declining unemployment rates and steady increases in employment. At the same time, the workforce is ageing. Baby boomers are working longer than their parents. Over the last 15 years, the proportion of people aged 55 to 64 who work has increased from 33% to 55% on average across the Organisation of Economic Co-operation and Development countries. In Germany, it

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Proportionality in bank regulation and supervision – a survey on current practices

March 19, 2019

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

This version

BCBS
 | 

Other

 | 
19 March 2019

PDF full text (264kb)
 | 
16 pages

Topics:
Basel core principles

The Basel Committee on Banking Supervision is today publishing the results of a survey it conducted on proportionality practices in bank regulation and supervision. The report summarises the responses received to the survey by Basel Committee member jurisdictions and those of the Basel Consultative Group.
In brief, the majority of

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Bond risk premia and the exchange rate

March 18, 2019

BIS Working Papers
 | 
No 775
 | 
18 March 2019

by 
Boris Hofmann,
Ilhyock Shim and
Hyun Song Shin

PDF full text (874kb)
 | 
35 pages

Summary
Focus
Exchange rates and market interest rates are closely related in emerging market economies (EMEs). A stronger currency goes hand in hand with lower market interest rates and generally looser financial conditions. A weaker currency is associated with higher market interest rates and tighter financial conditions.
Contribution
The paper lays out a framework where the exchange rate affects domestic market interest rates through the

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FX intervention and domestic credit: Evidence from high-frequency micro data

March 18, 2019

BIS Working Papers
 | 
No 774
 | 
18 March 2019

by 
Boris Hofmann,
Hyun Song Shin and
Mauricio Villamizar-Villegas

PDF full text (541kb)
 | 
36 pages

Summary
Focus
When a central bank buys or sells foreign exchange, these market interventions not only influence the exchange rate, but also the lending by domestic banks to domestic borrowers. The reason for the additional impact on domestic credit comes about because borrowers’ creditworthiness fluctuates with the value of the currency. When credit is judged to be growing too rapidly to maintain an even keel for the economy,

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Survey on the interaction of regulatory instruments: results and analysis

March 14, 2019

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

This version

BCBS
 | 

Working papers

 | 
14 March 2019
 | 

Status:  Current

PDF full text (1,115kb)
 | 
49 pages

Topics:
Liquidity risk,
Leverage ratio,
Credit risk

This report summarises and analyses the results of the third-wave survey conducted by the Research Task Force on the role of multiple regulatory constraints in the Basel III framework. The latest survey (end-December 2017) retains the format of the

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Statement on crypto-assets

March 13, 2019

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

This version

BCBS
 | 

Newsletters

 | 
13 March 2019
 | 

Status:  Current

Topics:

The past few years have seen a growth in crypto-assets. While the crypto-asset market remains small relative to that of the global financial system, and banks currently have very limited direct exposures, the Committee is of the view that the continued growth of crypto-asset trading platforms and new financial products related to crypto-assets has the potential to raise

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From carry trades to trade credit: financial intermediation by non-financial corporations

March 11, 2019

BIS Working Papers
 | 
No 773
 | 
11 March 2019

by 
Bryan Hardy and
Felipe Saffie

PDF full text (453kb)
 | 
50 pages

Summary
Focus
We study how firms in emerging market economies (EMEs) borrow and lend. We look at how firms exploit carry trades (eg when they can borrow in a low interest rate currency and lend in a high interest rate currency) and relate this to their borrowing activities and how they extend trade credit. We use a unique data set of non-financial firms in Mexico that includes detailed quarterly information on the currency and the structure of both assets and liabilities.

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On the global Impact of risk-off shocks and policy-put frameworks

March 8, 2019

BIS Working Papers
 | 
No 772
 | 
08 March 2019

by 
Ricardo Caballero and
Güneş Kamber

PDF full text (1,190kb)
 | 
57 pages

Summary
Focus
Big sell-offs in financial markets ("risk-off shocks") can trigger severe recessions if fiscal and monetary policymakers fail to respond appropriately. After the Great Financial Crisis (GFC), central banks in advanced economies resorted to unconventional monetary tools such as asset purchases. These measures successfully propped up the economy, but they have also been criticised for encouraging investors to buy riskier assets ("reach-for-yield

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Regulatory Consistency Assessment Programme (RCAP): Assessment of the Basel Committee’s NSFR regulations – Brazil

March 7, 2019

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

This version

BCBS
 | 

Implementation reports

 | 
07 March 2019
 | 

Status:  Current

PDF full text (220kb)
 | 
19 pages

Topics:
Liquidity risk

Through its Regulatory Consistency Assessment Programme (RCAP), the Basel Committee monitors the timely adoption of regulations by its members, assesses the regulations’ consistency with the Basel framework and examines the consistency of banks’ calculation of the prudential ratios across

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