Bank of International Settlement

The Basel Committee periodically reviews frequently asked questions (FAQs) on its standards and publishes answers to these together with technical elaboration of the rules text and interpretative guidance where necessary. These aim to promote consistent global implementation of Basel III. The FAQs published in this document correspond to the definition of capital sections of the Basel III standards and the 13 January 2011 press release on the...

The BIS Quarterly Review for September 2017: Strong outlook with low inflation spurs risk-taking Remarks by Mr Claudio Borio, Head of the Monetary and Economic Department, and Mr Hyun Song Shin, Economic Adviser & Head of Research, at the media briefing on 15 September 2017.   Contents International banking and financial market developments...

This report presents the results of the Basel Committee's latest Basel III monitoring exercise based on data as of 31 December 2016. The Committee established a rigorous reporting process to regularly review the implications of the Basel III standards for banks, and it has published the results of previous exercises since 2012. For the first time, the report provides not only global averages but also a regional breakdown for many key metrics....

by Eugenio Cerutti, Stijn Claessens and Andrew K Rose Summary Focus This paper seeks to measure the importance of the Global Financial Cycle for explaining international capital flows. Hélène Rey and others have argued that capital flows move in unison across countries. They put forward that this is because of financial conditions in key advanced countries - or "centre countries" - such as the...

The Basel Committee on Banking Supervision today released a consultative document on the implications of fintech for the financial sector. Sound practices: Implications of fintech developments for banks and bank supervisors assesses how technology-driven innovation in financial services, or "fintech", may affect the banking industry and the activities of supervisors in the near to medium term. Various future potential scenarios are considered,...

by Yu-Fu Chen, Michael Funke and Richhild Moessner This paper develops a new theoretical model with an asymmetric informal one-sided exchange rate target zone, with an application to the Swiss franc following the removal of the minimum exchange rate of CHF 1.20 per euro in January 2015. We extend and generalize the standard target zone model of Krugman (1991) by introducing perceived uncertainty...

by Carlos Cantú The literature on capital controls has focused on their use as tools to manage capital and improve macroeconomic and financial stability. However, there is a lack of analysis of their effect on foreign exchange (FX) market liquidity. In particular, technological and regulatory changes in FX markets over the past decade have had an influence on the effect of capital controls on alternative indicators...

Under the guidance of the Committee on Payments and Market Infrastructures (CPMI) and in cooperation with central banks in CPMI jurisdictions, the BIS compiles statistics on payments and financial market infrastructures, the so-called Red Book statistics. The CPMI today published a revised methodology of the Red Book statistics, which updates and enhances indicators on cashless payments and financial market infrastructures to reflect the...

by Michael Brei and Goetz von Peter The empirical gravity literature finds geographical distance to be a large and growing obstacle to trade, contradicting the popular notion that globalization heralds "the end of geography". This distance puzzle disappears, however, when measuring the effect of cross-border distance relative to that of domestic distance (Yotov, 2012). We uncover the same result for...

by Raphael Auer, Thomas Chaney and Philip Sauré This paper analyses firm's pricing-to-market decisions in vertically differentiated industries. We first present a model featuring firms that sell goods of heterogeneous quality levels to consumers who are heterogeneous in their income and thus their marginal willingness to pay for quality increments. We derive closed-form solutions for the unique...