Central Banks, National Balance Sheets and Global Balance

2018 ◽  
pp. 341-358
Author(s):  
Andrew Sheng
Keyword(s):  
Central Banks ◽  
Balance Sheets

scholarly journals Securitization of (bad) loans to Italian SMES: The role of the public guarantee

2021 ◽  
Vol 16 (4) ◽  
pp. 193-208
Author(s):  
Lucilla Bittucci ◽  
Stefano Marzioni ◽  
Pina Murè ◽  
Marco Spallone
Keyword(s):  
Financial Stability ◽  
Positive Impact ◽  
Central Banks ◽  
General Purpose ◽  
Recent Past ◽  
Balance Sheets ◽  
Access To Credit ◽  
The Public ◽  
Main Factors

This study investigates the main factors driving the evolution of the securitization of loans to Italian small and medium-sized enterprises (SMEs). The value of securitization increased in last two years, even though it has not been used as collateral for central banks. The disposal of non-performing loans (NPLs) may have been rather triggered by increasing attention of the international institutions to such an issue, within the general purpose of financial stability. The purpose of this paper is to interpret such a phenomenon focusing on Italian banks and restricting the analysis to the case of securitizations backed with loans to small and medium-sized enterprises (SMEs). The interesting result that emerges, supported by econometrically tested empirical evidence, is that given the orientation of international financial institutions, such as the ECB and the EBA, and reacting to incentives coming from the fiscal policy authorities for the public guarantee of loans, banks have been using securitization to reduce the burden on their bad balance sheets due to (NPLs). It was found that the public guarantee had a positive impact on SME securitization, whereas securitization in other sectors has not been affected significantly. Such evidence suggests that, in the absence of a public guarantee, the financial stability target would have been at risk, and the effectiveness of collateral-based policies in the recent past must be improved to enhance access to credit for SMEs.

scholarly journals Financial Independence of Central Bank through the Balance Sheet Prism

2014 ◽  
Vol 3 (2) ◽  
pp. 37-59 ◽  
Author(s):  
Valentina Ivanović
Keyword(s):  
Central Bank ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Balance Sheet ◽  
Central Banks ◽  
Central Bank Independence ◽  
Financial Independence ◽  
Balance Sheets ◽  
Financial Strength ◽  
The Global Financial Crisis

Abstract The main reason for central bank independence lies in the fact that it is necessary to clearly distinguish spending money from the ability of making money. Independence of central banks is now a characteristic of almost all developed and highly industrialized countries. In this respect, it represents an essential part of the overall economic reality of these countries. Over the past decade or somewhat earlier, the issue of importance of central bank independence has been raised in developing countries, making the institutional, functional, personal and financial independence of central banks current topics for consideration. The key reason for the growing attention to financial independence of central banks is due to the effects of the global financial crisis on their balance sheets and therefore the challenges related to achieving the basic goals of the functioning of central banks - financial stability and price stability. Financial strength and independence of central banks must be developed relative to the policy and tasks that are carried out and risks they face in carrying out of these tasks. Financial independence represents a key base for credibility of a central bank. On one hand, the degree of credibility is associated with the ability of central banks to carry out their tasks without external financial assistance. In order to enhance the credibility of central bank in this regard, it must have sufficient financial strength to absorb potential losses and that power must be continuously strengthened by increasing capital and rearranging profit allocation arrangements. This is particularly important in times of crisis.

Book Reviews

2017 ◽  
Vol 55 (1) ◽  
pp. 222-225
Keyword(s):  
Monetary Policy ◽  
Low Income ◽  
Central Banks ◽  
Low Income Countries ◽  
Balance Sheets ◽  
Flow Of Funds ◽  
Monetary Analysis ◽  
Policy Frameworks ◽  
Bank Of England

Bilin Neyapti of Bilkent University reviews “Monetary Analysis at Central Banks,” edited by David Cobham. The Econlit abstract of this book begins: “Four papers investigate how analysis of monetary and credit aggregates is used in modern central banks and how that analysis feeds through into policy making. Papers discuss monetary analysis and central banks (David Cobham); the analysis of money and credit during the financial crisis--the approach at the Bank of England (Jon Bridges, James Cloyne, Ryland Thomas, and Alex Tuckett); central banks as balance sheets of last resort--the European Central Bank's monetary policy in a flow-of-funds perspective (Philippine Cour-Thimann and Bernhard Winkler); and evolving monetary policy frameworks in low-income countries--the Tanzanian experience (Christopher Adam, Pantaleo Kessy, and Ben Langford).”

The Decline of Simplicity and the Rise of Unorthodoxy

2017 ◽  
Author(s):  
Pierre L. Siklos
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Central Banks ◽  
Policy Uncertainty ◽  
Structural Factors ◽  
Balance Sheets ◽  
Advanced Economies ◽  
The World ◽  
Bank Balance Sheets ◽  
Clear Idea

Crises come in various forms, and their impact is not predicable with much accuracy. Crises in emerging markets are not the same as those in advanced economies. By 2007, the idea that monetary policy ought to be rules-based was widely accepted and copied around the world. Policymakers believed that inflation and macroeconomic slack were all that mattered. Demographic and structural factors were underappreciated. The wrong conclusions are now being drawn: rules should not be abandoned, but monetary policy can be improved. Monetary policy now relies more on words. An expansion of central bank balance sheets has taken place and central bank independence is a quaint idea. Central banks no longer influence just prices; they also change financial system quantities. This leads to rising policy uncertainty. Central banks stand accused of hubris, with little clear idea of the “new normal” and how this will redefine a future monetary policy strategy.

Early Central Banks’ Economics and Balance Sheets

2019 ◽  
pp. 155-171
Author(s):  
Ulrich Bindseil
Keyword(s):  
Risk Management ◽  
Central Bank ◽  
Business Model ◽  
Balance Sheet ◽  
Central Banks ◽  
Central Banking ◽  
Management Approach ◽  
Balance Sheets ◽  
Bank Funding ◽  
High Level

This chapter summarizes the roles of the various central bank operations in the pre-1800 world, what one can conclude on the overall economics and business model of early central banking, and what this implies in terms of overall balance sheet and risk management approach. The ‘alchemical quest’ of early central banking included in particular the universal challenge of bank balance sheet management to achieve significant liquidity, maturity, and credit transformation while preserving bank funding stability also in future stress situations at a high level of confidence. Section 6.1 reviews again in one context the key balance sheet positions of early central banks and the associated economic functions and market operations. Section 6.2 systematically compares the operations of the major early central banks and reviews their balance sheet structures and relative sizes.

scholarly journals U.S. Monetary Policy Spillovers to Emerging Markets: Both Shocks and Vulnerabilities Matter

2021 ◽  
Vol 2021 (1321) ◽  
pp. 1-34
Author(s):  
Shaghil Ahmed ◽  
◽  
Ozge Akinci ◽  
Albert Queralto ◽  
◽  
...  
Keyword(s):  
Interest Rates ◽  
Emerging Market ◽  
Aggregate Demand ◽  
Central Banks ◽  
New Keynesian ◽  
Inflation Expectations ◽  
Balance Sheets ◽  
Macroeconomic Variables ◽  
Keynesian Model ◽  
Monetary Policy Spillovers

Using a macroeconomic model, we explore how sources of shocks and vulnerabilities matter for the transmission of U.S. monetary changes to emerging market economies (EMEs). We utilize a calibrated two-country New Keynesian model with financial frictions, partly-dollarized balance sheets, and imperfectly anchored inflation expectations. Contrary to other recent studies that also emphasize the sources of shocks, our approach allows the quantification of effects on real macroeconomic variables as well, in addition to financial spillovers. Moreover, we model the most relevant vulnerabilities structurally. We show that higher U.S. interest rates arising from stronger U.S. aggregate demand generate modestly positive spillovers to economic activity in EMEs with stronger fundamentals, but can be adverse for vulnerable EMEs. In contrast, U.S. monetary tightenings driven by a more-hawkish policy stance cause a substantial slowdown in activity in all EMEs. Our model also captures the challenging policy tradeos that EME central banks face. We show that these tradeoffs are more favorable when inflation expectations are well anchored.

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