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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

Bank failure management – the role of deposit insurance

3 days ago

FSI Papers
 | 
No 17
 | 
23 August 2019

by 

Patrizia Baudino,

Ryan Defina,

José María Fernández Real,

Kumudini Hajra and

Ruth Walters

PDF full text (417kb)
 | 
38 pages

Managing bank failures is complex and costly. One way to expand the toolbox and fund its use is through the role of deposit insurance schemes (DIS). Where permitted by the applicable legal framework governing deposit insurance and crisis management, DIS may facilitate and support alternative measures to payout of insured deposits. Based on survey responses from around 50 International Association of

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Frequently asked questions on the Basel III standardised approach for operational risk

12 days ago

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

This version

BCBS
 | 

FAQs

 | 
14 August 2019
 | 

Status:  Forthcoming

PDF full text (115kb)
 | 
6 pages

Topics:
Operational risk

The Basel Committee on Banking Supervision finalised the the new standardised approach (SA) for operational risk capital, as published in the final Basel III standards in December 2017. To promote consistent global implementation of those requirements, the Committee has agreed to periodically review

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Exchange rate puzzles: evidence from rigidly fixed nominal exchange rate systems

17 days ago

BIS Working Papers
 | 
No 805
 | 
09 August 2019

by 

Charles Engel and

Feng Zhu

PDF full text (841kb)
 | 
49 pages

Focus
This paper focuses on six major exchange rate puzzles identified by the literature: the excess volatility of real exchange rates; their excess reaction to the real interest rate differentials; the uncovered interest rate parity (UIP) puzzle; the excess persistence of real exchange rates; the exchange rate disconnect puzzle; and the consumption correlation puzzle. We examine the behaviour of real exchange rates among pairs of economies that have rigidly fixed nominal

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(Un)conventional policy and the effective lower bound

17 days ago

BIS Working Papers
 | 
No 804
 | 
09 August 2019

by 

Fiorella De Fiore and

Oreste Tristani

PDF full text (425kb)
 | 
47 pages

Focus
In response to the 2008-09 crisis, central banks aggressively cut monetary policy rates and implemented a broad set of unconventional monetary policy measures. We propose a simple framework to analyse the optimal sequencing of standard policy and unconventional measures.
Contribution
In our model, central banks implement unconventional measures to provide credit to the economy when bank lending is impaired. We seek answers to the following questions. If

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Determinants of credit growth and the bank-lending channel in Peru: A loan level analysis

26 days ago

BIS Working Papers
 | 
No 803
 | 
31 July 2019

by 

José Bustamante,

Walter Cuba and

Rafael Nivin

PDF full text (402kb)
 | 
33 pages

Focus
This paper investigates how the specific characteristics of Peruvian banks can have different effects on the supply of loans, the bank lending channel and the impact of variation in metal prices. The analysis is made for both the domestic and foreign currency, which is a special characteristic of the Peruvian case, and we use loan-level data and information on bank balance sheets. The methodology consists on a panel data model with fixed effect

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A loan-level analysis of bank lending in Mexico

26 days ago

BIS Working Papers
 | 
No 802
 | 
31 July 2019

by 

Carlos Cantú,

Roberto Lobato,

Calixto López and

Fabrizio Lopez-Gallo

PDF full text (549kb)
 | 
35 pages

Focus
This paper studies how bank characteristics affect the credit supply in Mexico. We analyse how these features influence banks’ response to shocks. We compare the conduct of domestic banks to that of foreign banks’ subsidiaries active in Mexico. Finally, we study the role of other micro variables (loan, bank-firm relationship, firm, industry) in the credit supply and the transmission of shocks. For this purpose, we use

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The internationalization of domestic banks and the credit channel: an empirical assessment

26 days ago

BIS Working Papers
 | 
No 801
 | 
31 July 2019

by 

Paola Morales,

Daniel Osorio and

Juan Sebastian Lemus-Esquivel

PDF full text (692kb)
 | 
34 pages

Focus
This paper asks how the expansion of Colombian banks overseas affects the strength of the credit channel in Colombia (i.e., how monetary policy influences bank balance sheets). We investigate the effect of Colombian banks’ acquisitions in foreign jurisdictions, mainly in Central American countries, as this is the most important structural change in the Colombian banking system in recent years.
Contribution
The paper contributes

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Banks’ business model and credit supply in Chile: the role of a state-owned bank

26 days ago

BIS Working Papers
 | 
No 800
 | 
31 July 2019

by 

Miguel Biron,

Felipe Córdova and

Antonio Lemus

PDF full text (526kb)
 | 
33 pages

Focus
During the global financial crisis (GFC) of 2008-09 banks in the world suffered losses not observed since the Great Depression of 1929. The response from banks regulatory authorities included measures affecting how banks grant loans, react to monetary policy shocks, and respond to global shocks. 
In this paper, we study the case of Chile, a small developing economy and exporter of raw materials, which is open to international financial markets.

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Monetary policy surprises and employment: evidence from matched bank-firm loan data on the bank lending-channel

26 days ago

BIS Working Papers
 | 
No 799
 | 
31 July 2019

by 

Rodrigo Barbone Gonzalez

PDF full text (773kb)
 | 
53 pages

Focus
This paper evaluates the impacts of monetary policy surprises on credit supply and employment using comprehensive loan and firm-level data from Brazil. Heterogeneities across financial intermediaries are relevant for the transmission of monetary policy at large, in particular, bank capital. However, identification of unexpected monetary policy shocks can be challenging. In this this paper, I rely on a high-frequency identification strategy to disentangle expected and unexpected

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How do bank-specific characteristics affect lending? New evidence based on credit registry data from Latin America

26 days ago

BIS Working Papers
 | 
No 798
 | 
31 July 2019

by 

Carlos Cantú,

Stijn Claessens and

Leonardo Gambacorta

PDF full text (677kb)
 | 
36 pages

Focus
This paper summarises the result of a joint research project by five central banks in Latin America (Brazil, Chile, Colombia, Mexico and Peru). It evaluates how bank-specific characteristics affect the supply of credit. Each study uses granular credit registry data to disentangle factors affecting credit demand from those affecting credit supply. Since data confidentiality does not allow the data to be pooled, the results are summarised

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Monetary policy spillovers, capital controls and exchange rate flexibility, and the financial channel of exchange rates

July 25, 2019

BIS Working Papers
 | 
No 797
 | 
25 July 2019

by 

Georgios Georgiadis and

Feng Zhu

PDF full text (1,119kb)
 | 
56 pages

Focus
The "trilemma hypothesis" would make it impossible for a country to have, at one and the same time, a fixed foreign exchange rate, free cross-border flows of capital and an independent monetary policy. To test this hypothesis, we estimate Taylor rule-type monetary policy reaction functions for 47 advanced and emerging market economies from January 2002 to December 2018. The Taylor rule-type factors we look at are the lagged policy rate, real-time forecasts for

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Margin requirements for non-centrally cleared derivatives

July 23, 2019

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

Margin requirements for non-centrally cleared derivatives

18 Mar 2015

Type:  Standards

Status:  Superseded

This version

BCBS
 | 

Standards

 | 
23 July 2019
 | 

Status:  Current

PDF full text (333kb)
 | 
30 pages

Topics:
Market

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Measuring contagion risk in international banking

July 15, 2019

BIS Working Papers
 | 
No 796
 | 
15 July 2019

by 

Stefan Avdjiev,

Paolo Giudici and

Alessandro Spelta

PDF full text (577kb)
 | 
40 pages

Focus
The rapid growth of the global financial system over the past couple of decades has increased the importance of properly measuring contagion risk. This is true not only from a financial stability point of view, but also from a macroeconomic perspective, as financial crises tend to have significant and persistent negative effects on economic activity. At the same time, the increased interconnectedness and complexity of the global banking

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Unintended consequences of unemployment insurance benefits: the role of banks

July 11, 2019

BIS Working Papers
 | 
No 795
 | 
11 July 2019

by 

Yavuz Arslan,

Ahmet Degerli and

Gazi Kabaş

PDF full text (1,477kb)
 | 
65 pages

Focus
Unemployment is one of the most important economic risks faced by individuals. For this reason, governments provide unemployment insurance (UI) to their citizens by providing a certain level of income for a limited time during the spell of unemployment. At the macro level, UI is regarded as an efficient fiscal policy tool that smooths business cycles. However, to the extent that UI lowers individual and macroeconomic risks, it should reduce

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Why have interest rates fallen far below the return on capital

July 9, 2019

BIS Working Papers
 | 
No 794
 | 
09 July 2019

by 

Magali Marx,

Benoit Mojon and

François R. Velde

PDF full text (584kb)
 | 
39 pages

Focus
Why are interest rates so low today? Many believe that the worldwide abundance of savings is due to the retirement of OECD baby-boomers and the Chinese one-child policy. Can these factors explain the fall in long-term real interest rates, from around 4.5% in 1990 to around 0% since 2015? By contrast, the return on capital, defined as profits over the stock of capital, if anything, increased from 1990 to 2000 and remained stable at around 10%

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Proportionality under Pillar 2 of the Basel framework

July 5, 2019

FSI Papers
 | 
No 16
 | 
05 July 2019

by 

Vincent Duckwitz,

Stefan Hohl,

Katrin Weissenberg and

Raihan Zamil

PDF full text (517kb)
 | 
32 pages

Executive Summary (103 KB, PDF)

Pillar 2 of the Basel framework aims to ensure that the minimum Pillar 1 capital and liquidity requirements are better aligned with a bank’s overall risk profile. Pillar 2 accommodates a range of banks and banking systems and it needs to be applied proportionately. This paper outlines the Pillar 2 implementation approaches in 16 jurisdictions, focusing on whether and how they apply

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Regulatory Consistency Assessment Programme (RCAP): Assessment of the Basel Committee’s large exposures framework – India

July 4, 2019

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

This version

BCBS
 | 

Implementation reports

 | 
04 July 2019
 | 

Status:  Current

PDF full text (232kb)
 | 
20 pages

Topics:
Credit 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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Regulatory Consistency Assessment Programme (RCAP): Assessment of the Basel Committee’s Net Stable Funding Ratio standard – Australia

July 4, 2019

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

This version

BCBS
 | 

Implementation reports

 | 
04 July 2019
 | 

Status:  Current

PDF full text (267kb)
 | 
22 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

Read More »

Regulatory Consistency Assessment Programme (RCAP): Assessment of the Basel Committee’s Net Stable Funding Ratio standard – Canada

July 4, 2019

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

This version

BCBS
 | 

Implementation reports

 | 
04 July 2019
 | 

Status:  Current

PDF full text (272kb)
 | 
24 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

Read More »

Regulatory Consistency Assessment Programme (RCAP): Assessment of the Basel Committee’s Net Stable Funding Ratio standard – India

July 4, 2019

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

This version

BCBS
 | 

Implementation reports

 | 
04 July 2019
 | 

Status:  Current

PDF full text (265kb)
 | 
24 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

Read More »

Regulatory Consistency Assessment Programme (RCAP): Assessment of the Basel Committee’s large exposures framework – Canada

July 4, 2019

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

This version

BCBS
 | 

Implementation reports

 | 
04 July 2019
 | 

Status:  Current

PDF full text (213kb)
 | 
16 pages

Topics:
Credit 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

Read More »

Regulatory Consistency Assessment Programme (RCAP): Assessment of the Basel Committee’s large exposures framework – Australia

July 4, 2019

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

This version

BCBS
 | 

Implementation reports

 | 
04 July 2019
 | 

Status:  Current

PDF full text (247kb)
 | 
20 pages

Topics:
Credit 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

Read More »

Ten years after the Great Financial Crisis: what has changed?

July 4, 2019

BIS Papers
 | 
No 103
 | 
04 July 2019

PDF full text (359kb)
 | 
19 pages

The 17th BIS Annual Conference took place in Zurich, Switzerland, on 22 June 2018. The event brought together a distinguished group of central bank Governors, leading academics and former public officials to exchange views on the topic "Ten years after the Great Financial Crisis: what has changed?". The papers presented at the conference and the discussants’ comments are released as BIS Working Papers No 790, 791, 792 and 793.
BIS Papers No 103 contains Panel remarks by Mervyn King (former Governor, Bank of England) and Anne Le

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Global real rates: a secular approach

July 4, 2019

BIS Working Papers
 | 
No 793
 | 
04 July 2019

by 

Pierre-Olivier Gourinchas and

Hélène Rey

PDF full text (1,989kb)
 | 
79 pages

Focus
We propose a simple framework to explain low global real risk-free interest rates. We use a global resource constraint to link real rates with consumption and wealth. This relationship serves as an empirical framework to explain past secular declines of the risk-free rate, as well as to project its future trend.
Contribution
We highlight the importance of the consumption-to-wealth ratio in explaining the real interest rate. Different decompositions of

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Is the financial system sufficiently resilient: a research programme and policy agenda

July 4, 2019

BIS Working Papers
 | 
No 792
 | 
04 July 2019

by 

Paul Tucker

PDF full text (1,128kb)
 | 
49 pages

Focus
The paper discusses why the financial system is not as resilient as policymakers currently claim – despite extensive regulatory reforms from a very weak starting point.
Contribution
The paper discusses different policy strategies for making some of the debt of some banks "information-insensitive", so that they it would be treated as safe in all but the most stressed circumstances. For the current prudential strategy, which is centred on minimum equity requirements, the paper argues that

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Has globalization changed the inflation process?

July 4, 2019

BIS Working Papers
 | 
No 791
 | 
04 July 2019

by 

Kristin Forbes

PDF full text (1,254kb)
 | 
63 pages

Focus
This paper assesses whether globalisation should be included more comprehensively in models that forecast and explain inflation. The world economy has changed in ways which imply that global factors play a greater role in price dynamics. Key changes include greater trade flows, the greater heft of emerging markets and their impact on commodity prices, and the greater use of supply chains to shift production to cheaper locations. The increased role of these global factors could also

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Revisions to leverage ratio disclosure requirements

June 26, 2019

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

Pillar 3 disclosure requirements – updated framework

11 Dec 2018

Type:  Standards

Status:  Forthcoming

Revisions to leverage ratio disclosure requirements

13 Dec 2018

Type:  Consultative

Status:  Closed

Read More »

Leverage ratio treatment of client cleared derivatives

June 26, 2019

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

Basel III: Finalising post-crisis reforms

7 Dec 2017

Type:  Standards

Status:  Forthcoming

Leverage ratio treatment of client cleared derivatives

18 Oct 2018

Type:  Consultative

Status:  Closed

Read More »

The costs and benefits of bank capital – a review of the literature

June 24, 2019

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

This version

BCBS
 | 

Working papers

 | 
24 June 2019
 | 

Status:  Current

PDF full text (750kb)
 | 
33 pages

Topics:
Credit risk,
Liquidity risk,
Market risk

In 2010, the Basel Committee on Banking Supervision published an assessment of the long-term economic impact (LEI) of stronger capital and liquidity requirements (BCBS (2010)). This paper considers this assessment in light of estimates from later studies of the

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