by Ana Aguilar, Carlos Cantú and Claudia RamírezWe model the interaction between fiscal and monetary policy and qualify their effects in a semi-structural small open economy model calibrated for Mexico. In our model, fiscal and monetary policy follow rules tied to specific targets. We estimate how fiscal policy, through deficits and public debt accumulation, and …
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Gaining momentum – Results of the 2021 BIS survey on central bank digital currencies
12 days agoMost central banks are exploring central bank digital currencies (CBDCs), and more than a quarter of them are now developing or running concrete pilots. This BIS paper updates earlier surveys that asked central banks about their engagement in this area. The latest responses from 81 central banks show that the Covid-19 pandemic and the emergence …
Read More »The design of a data governance system
13 days agoTechnological developments over the last two decades have led to an explosion in the availability of data and their processing. Consumers often do not know the benefits of the data they generate, and find it difficult to assert their rights regarding the collection, processing and sharing of their data. We propose a data governance system …
Read More »Are major advanced economies on the verge of a wage-price spiral?
14 days agoby Frederic Boissay, Fiorella De Fiore, Deniz Igan, Albert Pierres Tejada and Daniel ReesInflation has returned, reaching levels not seen in decades. Whether inflation enters a persistently higher regime will depend on labour market developments, and on whether a wage-price spiral emerges. …
Read More »Big techs, QR code payments and financial inclusion
14 days agoby Thorsten Beck, Leonardo Gambacorta, Yiping Huang, Zhenhua Li and Han QiuUsing a unique dataset of around half a million Chinese firms that use a QR code-based mobile payment system, we find that (i) the creation of a digital payment footprint allows firms to access credit provided by the same big tech company; (ii) transaction …
Read More »Core Principles for Effective Deposit Insurance Systems – Executive Summary
20 days agoThe International Association of Deposit Insurers (IADI) Core Principles for Effective Deposit Insurance Systems are intended for jurisdictions that wish to establish or enhance their deposit insurance systems. The Core Principles (CPs) were originally published in 2009. In 2014, IADI issued the Revised Core Principles for Effective Deposit Insurance Systems in response to the lessons …
Read More »CBDCs in emerging market economies
April 14, 2022BIS Papers No 123 – Papers in this volume were prepared for a meeting of emerging market Deputy Governors organised by the Bank for International Settlements on 9–10 February 2022.
Read More »Central bank digital currencies: a new tool in the financial inclusion toolkit?
April 12, 2022Central banks are considering how retail central bank digital currencies (CBDCs) may help support financial inclusion. While they are not a magic bullet, central banks see CBDC as a further tool to promote financial inclusion if this goal features prominently in the design from the get-go.
Read More »Supervisory practices for assessing the sustainability of banks’ business models
April 7, 2022Banks rarely become weak overnight, and flaws in business models and strategies are often the root causes of banks’ vulnerabilities and failures. While sudden shocks may be the immediate cause of banks’ demise, the root causes are generally more structural. …
Read More »Business continuity planning at central banks during and after the pandemic
April 6, 2022Report by the Consultative Group on Risk Management (CGRM) established at the BIS Representative Office for the Americas
Read More »Project Ellipse: an integrated regulatory data and analytics platform
March 31, 2022Project Ellipse
Read More »Risk data aggregation and risk reporting – Executive Summary
March 25, 2022Stress tests are forward-looking exercises that aim to evaluate the impact of severe but plausible adverse scenarios on the resilience of financial firms.
Read More »Financial openness and inequality
March 24, 2022by Stefan Avdjiev and Tsvetana SpasovaWe conduct a comprehensive empirical examination of the link between inequality and external financial openness for a sample of 48 countries between 1991 and 2013.
Read More »Central banks, the monetary system and public payment infrastructures: lessons from Brazil’s Pix
March 23, 2022by Angelo Duarte, Jon Frost, Leonardo Gambacorta, Priscilla Koo Wilkens and Hyun Song ShinPublic payment infrastructures build on the central bank’s foundational role in the monetary system by promoting competition and interoperability between payment platforms. They can reduce costs for users and promote financial inclusion. Brazil’s recent experience with the Pix retail instant payment system …
Read More »Project Dunbar – International settlements using multi-CBDCs
March 22, 2022Project Dunbar explores how a common platform for multiple central bank digital currencies (multi-CBDCs) could enable cheaper, faster and safer cross-border payments. It identified challenges of implementing a multi-CBDC platform shared across central banks and proposed practical design approaches to address them.
Read More »Quantitative forward guidance through interest rate projections
March 21, 2022by Boris Hofmann and Dora XiaWe assess quantitative forward guidance through interest rate projections along four key dimensions: (i) predictability, (ii) credibility, (iii) redundancy and (iv) consistency.
Read More »Anchoring of inflation expectations: has past progress paid off?
March 17, 2022by Tirupam Goel and Kostas TsatsaronisIn the decade before the pandemic, inflation expectations became less volatile worldwide, as well as more consistent with inflation targets and less sensitive to inflation surprises. This progress has paid off for many economies during the past year’s surge in inflation: long-term expectations have remained largely anchored, but with notable …
Read More »The monetary-fiscal policy nexus in the wake of the pandemic
March 16, 2022BIS Papers No 122 – The papers in this volume were prepared for a meeting of senior officials from central banks held at the Bank for International Settlements on 24-25 February 2021.
Read More »Housing market risks in the wake of the pandemic
March 10, 2022by Deniz Igan, Emanuel Kohlscheen and Phurichai RungcharoenkitkulHouse prices rose strongly in advanced economies during the pandemic, breaking with typical post-recession patterns. These developments support domestic demand in the short term but carry risks to the outlook if they reverse. Rapid economic recovery, fiscal support and high saving rates amid negative real interest rates explain …
Read More »Deconstructing ESG scores: how to invest with your own criteria
March 9, 2022by Torsten Ehlers, Ulrike Elsenhuber, Anandakumar Jegarasasingam and Eric JondeauWe demonstrate an investment strategy based on deconstructing ESG scores. The strategy focuses on specific underlying ESG categories such as emissions reduction and human rights.
Read More »Cross-border regulatory spillovers and macroprudential policy coordination
March 7, 2022by Pierre-Richard Agénor, Timothy Jackson and Luiz Awazu Pereira da SilvaA core-periphery model with financial frictions, imperfect financial integration, and cross-border banking is used to assess the magnitude of regulatory spillovers and the gains from international macroprudential policy coordination.
Read More »BIS Quarterly Review, March 2022
February 28, 2022BIS Quarterly Review for March 2022 – The March 2022 Quarterly Review highlights research that relates lending patterns to financial intermediaries’ funding sources and examines long-term growth prospects.
Read More »Estimating conditional treatment effects of EIB lending to SMEs in Europe
February 24, 2022by Alessandro Barbera, Áron Gereben and Marcin WolskiWe shed light on the transmission channels of public support schemes to the SME sector by investigating whether the positive impacts of EIB support vary depending on types of intermediaries and financial term sheets.
Read More »The NAIRU and informality in the Mexican labor market
February 23, 2022by Ana Aguilar, Carlo Alcaraz, Claudia Ramírez and Cid Alonso Rodríguez-PérezIn this paper, we present an estimation of the traditional NAIRU for Mexico and an alternative measure that includes informality as an indicator of labor underutilization.
Read More »Original sin redux: a model-based evaluation
February 22, 2022by Boris Hofmann, Nikhil Patel and Steve Pak Yeung WuThis paper provides a model-based evaluation of the original sin redux hypothesis based on a two-country model.
Read More »Global production linkages and stock market co-movement
February 17, 2022by Raphael Auer, Bruce Muneaki Iwadate, Andreas Schrimpf and Alexander F. WagnerWith our new measures, we provide evidence of a strong link between changes in real integration – in particular via GVCs – and equity market co-movement.
Read More »The regulatory response to climate risks: some challenges
February 17, 2022FSI Briefs No 16, February 2022. There is a need for authorities to review their prudential frameworks with a view to taking full account of the implications of climate-related financial risks for financial stability. Given the longer time horizons and the higher degree of uncertainty associated with the materialisation of climate-related financial risks, standard Pillar …
Read More »Exorbitant privilege? Quantitative easing and the bond market subsidy of prospective fallen angels
February 16, 2022by Viral V Acharya, Ryan Niladri Banerjee, Matteo Crosignani, Tim Eisert and Renée SpigtWe document capital misallocation in the U.S. investment-grade (IG) corporate bond market, driven by quantitative easing (QE)
Read More »Unequal expenditure switching: Evidence from Switzerland
February 16, 2022by Raphael Auer, Ariel Burstein, Sarah M Lein and Jonathan VogelWe find that demand from lower-income households is substantially more price elastic than that of high-income households.
Read More »Covid-19 and the monetary-fiscal policy nexus in Africa
February 10, 2022The Covid-19 pandemic reinforced the already close interactions between monetary and fiscal policies in Africa. Policymakers provided support to their economies in a coordinated way. Both policies were countercyclical and complementary. Central banks reacted more forcefully than fiscal authorities, as high debt constrained the fiscal response…
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