scholarly journals The Mexican debt crisis redux: international interbank markets and financial crisis, 1977–1982

2015 ◽  
Vol 22 (1) ◽  
pp. 79-105 ◽  
Author(s):  
Sebastian Alvarez
Keyword(s):  
Financial Crisis ◽  
Sovereign Debt ◽  
Banking Sector ◽  
Debt Crisis ◽  
International Banking ◽  
Public And Private ◽  
International Lending ◽  
Interbank Markets ◽  
Interbank Lending ◽  
Currency Mismatches

The international banking crisis that began in 2007 has brought the relationship between international banking activities and financial crises to the forefront. The growing reliance on foreign interbank funding by domestic banks has been recognized as a crucial factor in explaining the banking and sovereign debt crisis currently affecting several peripheral European countries. This article shows that the link between financial crisis and international interbank lending is not a new phenomenon; a similar trend can be observed in the Mexican banking sector during the run-up to its 1982 debt crisis. I explore the international activities of Mexican commercial banks in the years preceding the country's default and demonstrate that they became involved in international lending which was funded largely through heavy short-term interbank foreign borrowing. I provide new archival evidence which shows that in intermediating foreign finance with local public and private borrowers, Mexican banks incurred maturity, interest rate and currency mismatches and dangerously increased their risk position. This article provides insights for understanding the Mexican debt crisis as closely intertwined with problems in the domestic banking sector, which were, in turn, linked to its involvement in the international financial system.

Conclusion

2018 ◽  
Author(s):  
Nauro F. Campos ◽  
Paul De Grauwe ◽  
Yuemei Ji
Keyword(s):  
Financial Crisis ◽  
Business Cycle ◽  
Sovereign Debt ◽  
Global Financial Crisis ◽  
Debt Crisis ◽  
Structural Reform ◽  
Structural Reforms ◽  
Sovereign Debt Crisis ◽  
The Business Cycle ◽  
The Global Financial Crisis

Structural reform policies move like the business cycle. There are moments when these are implemented with great fervour and others when they are put on the back burner or even dismantled. After the global financial crisis, and in particular the sovereign debt crisis in Europe, many countries were forced by creditor countries or were self-imposed to apply deep reforms to their product markets and especially to their labour markets. Now that Europe is recovering, the pressure to implement structural reforms has abated....

On Financial Contagion Through ETFs

2020 ◽  
pp. 82-101
Author(s):  
Alexia Thomaidou ◽  
Dimitris Kenourgios
Keyword(s):  
Financial Crisis ◽  
Sovereign Debt ◽  
Global Financial Crisis ◽  
Debt Crisis ◽  
Financial Contagion ◽  
Sovereign Debt Crisis ◽  
European Sovereign Debt Crisis ◽  
The Interest Rate ◽  
The Global Financial Crisis ◽  
The Impact

This chapter investigates the impact of the Global Financial Crisis and the European Sovereign Debt Crisis in ETFs across regions and segments. In particular, two tests are taking place, with the first one to examine if there is evidence of contagion effect and the second one to test the affection of risks in each pair of ETFs. The evidence across the stable period and the two crisis periods suggests the existence of the transmission of shocks from the Global Financial ETF to regional and sectoral ETFs. However, there is evidence that some of the ETFs remain less unaffected during both crises and some of them are immune. Moreover, the authors examine the impact of several control variables, which represent various risks, to the correlation of each pair of ETFs and the results show the influence of the interest rate risk and interbank liquidity risk during the Global Financial Crisis and the European Sovereign Debt Crisis.

Capital Shortfall: A New Approach to Ranking and Regulating Systemic Risks

2012 ◽  
Vol 102 (3) ◽  
pp. 59-64 ◽  
Author(s):  
Viral Acharya ◽  
Robert Engle ◽  
Matthew Richardson
Keyword(s):  
Financial Crisis ◽  
Sovereign Debt ◽  
Debt Crisis ◽  
Stress Tests ◽  
New Approach ◽  
The Past ◽  
Systemic Risks ◽  
Reliable Interpretation ◽  
Available Information ◽  
Financial Firm

The financial crisis of 2007-2009 has given way to the sovereign debt crisis of 2010-2012, yet many of the banking issues remain the same. We discuss a method to estimate the capital that a financial firm would need to raise if we have another financial crisis. This measure of capital shortfall is based on publicly available information but is conceptually similar to the stress tests conducted by US and European regulators. We argue that this measure summarizes the major characteristics of systemic risk and provides a reliable interpretation of the past and current financial crises.

scholarly journals Diversity across EU banking sectors: Poorly researched and underappreciated

2018 ◽  
Vol 87 (4) ◽  
pp. 153-179
Author(s):  
Hans-Helmut Kotz ◽  
Dorothea Schäfer
Keyword(s):  
Financial Crisis ◽  
Sovereign Debt ◽  
Large Scale ◽  
Goodness Of Fit ◽  
Banking Sector ◽  
Financial Sector ◽  
Future Research ◽  
Banking Union ◽  
The European Union ◽  
Research Gaps

Zusammenfassung: Das Interesse an der Rolle der Vielfalt im Bankensektor hat erheblich zugenommen, seit die Finanzkrise (und die anschließenden Staatsschuldenkrisen) die europäischen Länder in unterschiedlicher Weise getroffen haben. In diesem Überblicksartikel werden entscheidende Forschungslücken im Bereich der Vielfalt im Bankensektor herausgearbeitet. Vorbereitend dazu bilanzieren wir die Vielfalt der Bankensektoren in der Europäischen Union und beleuchten die Unterschiede vor und nach der Finanzkrise. Kernpunkte einer künftigen Forschungsagenda zur Bewertung der Diversität im Bankensektor (und im Finanzsektor im Allgemeinen) sind: (a) die Definition der empirischen Bedeutung des Konzepts und damit seiner messbaren Eigenschaften, (b) die Beziehung zwischen Diversität und Wettbewerbsniveau (Marktmacht) im Bankensektor, (c) die Verbindung zwischen Diversität und Stabilität des Bankensektors, (d) die Relevanz der Diversität im Bankensektor für einen erleichterten Zugang zu Finanzierung, insbesondere für KMU, und (e) die Verknüpfungen zwischen Diversität im Bankensektor (Finanzsektor) und nichtfinanzieller, „realer“ wirtschaftlicher Diversität („Goodness of fit“-Problematik, institutionelle Einbettung). Die aufgezeigten Forschungslücken zu schließen, wäre ein wichtiger Beitrag sowohl zur Debatte über eine tiefere Integration der europäischen Finanzmärkte (Bankenunion, Kapitalmarktunion) als auch zur Debatte über eine nachhaltige Finanzarchitektur, die gleichzeitig Innovation und Wachstum fördert und die Gesellschaft wirksam vor großen Finanzkrisen schützt. Summary: Interest in the role of diversity in banking sectors has increased substantially since the financial crisis (and the subsequent sovereign debt crises) have hit European countries differentially. The purpose of this note is to hint at crucial research gaps in terms of appreciating consequences of this variety. In preparation for this, we take stock of the across country diversity of banking sectors in the European Union before and after the financial crisis. Key issues in a future research agenda for evaluating diversity in the banking sector (and the financial sector more generally) have to do with: (a) defining the concept’s empirical meaning and hence its measurable properties, (b) the relationship between diversity and the level of competition (market power)in the banking sector, (c) the link between diversity and banking sector stability, (d) the pertinence of banking sector diversity for mitigating access to finance problems, in particular for SMEs and (e) the interlinkages between diversity in the banking (financial) sector and non-financial, “real” economy diversity (“goodness of fit”-issue, institutional embededdness). Filling the indicated research gaps would be an important contribution to both the debate on deeper integration of Europe’s financial markets (Banking Union, Capital Markets Union)as well as the debate on a sustainable financial architecture, being at the same time conducive to innovation and growth whilst protecting society effectively from large-scale financial crises.

scholarly journals Stressed Interbank Markets: Evidence from the European Financial and Sovereign Debt Crisis

2016 ◽  
Author(s):  
Juan Carlos Frutos ◽  
Carlos Garcia-de-Andoain ◽  
Florian Heider ◽  
Patrick Papsdorf
Keyword(s):  
Sovereign Debt ◽  
Debt Crisis ◽  
Sovereign Debt Crisis ◽  
Interbank Markets

Towards a full harmonization of the European banking regulation: Dilemmas in a legal discourse between regulation and enforcement

2019 ◽  
Vol 26 (2) ◽  
pp. 190-216
Author(s):  
Matteo De Poli ◽  
Pierre de Gioia Carabellese
Keyword(s):  
European Union ◽  
Sovereign Debt ◽  
Banking Sector ◽  
Debt Crisis ◽  
Banking Regulation ◽  
Main Theme ◽  
The European Union ◽  
Single Supervisory Mechanism ◽  
Legal Literature ◽  
European Banking

With the birth of the Single Supervisory Mechanism came the emergence of a new regime of supervision of the banking industry in the Eurozone. The allocation of enforcement powers between the European Central Bank and the National Competent Authorities is the corollary of the unified supervision, which reverberates from the Single Supervisory Mechanism, and it is ultimately the main theme of this contribution. More specifically, the architecture of the enforcement, principally shaped by the SSM and its principles and rules, is assessed and analysed in this paper against the background of the general theory of enforcement, as developed in the legal literature. The enforcement discourse in the European Union banking sector is debated alongside its interaction with the related aspects of the regulation and supervision and the way these three notions have been integrated and codified in the European Union after the 2011 sovereign debt crisis.

Global Financial Crisis: Exploring the Special Role of U.S. Banks and Regulations

2016 ◽  
Vol 4 (1) ◽  
Author(s):  
Nabila Nisha
Keyword(s):  
Financial Crisis ◽  
Financial Markets ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Special Role ◽  
Subprime Lending ◽  
International Banking ◽  
The Government ◽  
The Global Financial Crisis

Financial markets have suffered the greatest dislocation following the truly seismic significance of the global financial crisis. Regulators argue that the banking sector played a particularly special role in triggering the causes of the subprime debacle, thereby leading to the occurrence of the global financial crisis. Banks previously functioned as only a financial intermediary, but certain developments in the international banking sector like deregulation, technological progress, consolidation and competition, securitisation and financial innovation, resulted in banks being involved in subprime lending activities and hence, a reason behind the financial turmoil. The aim of this paper is to scrutinise the special role of banks in the global financial crisis and to stress on the need for increased regulation and their implications on the banking sector. The current study will thus contribute to the examination of the salient features of the global financial crisis and provide regulatory suggestions for the banking sector and the government as a whole.

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