scholarly journals Arbitrage Capital of Global Banks

2021 ◽  
Vol 2021 (032) ◽  
pp. 1-66
Author(s):  
Alyssa G. Anderson ◽  
◽  
Wenxin Du ◽  
Bernd Schlusche ◽  
◽  
...  
Keyword(s):  
Mutual Fund ◽  
Primary Response ◽  
Regulatory Environment ◽  
Short Term ◽  
Interest Rate Parity ◽  
Excess Reserves ◽  
Rate Parity ◽  
Global Banks ◽  
The U.S

We show that the role of unsecured, short-term wholesale funding for global banks has changed significantly in the post-financial-crisis regulatory environment. Global banks mainly use such funding to finance liquid, near risk-free arbitrage positions—in particular, the interest on excess reserves arbitrage and the covered interest rate parity arbitrage. In this environment, we examine the response of global banks to a large negative wholesale funding shock as a result of the U.S. money market mutual fund reform implemented in 2016. In contrast to past episodes of wholesale funding dry-ups, we find that the primary response of global banks to the reform was a cutback in arbitrage positions that relied on unsecured funding, rather than a reduction in loan provision.

“A Hidden War”

2020 ◽  
pp. 109-146
Author(s):  
Pierre-Hugues Verdier
Keyword(s):  
United States ◽  
Large Scale ◽  
The United States ◽  
Payment Systems ◽  
Terrorist Groups ◽  
Negative Publicity ◽  
State Prosecutors ◽  
Global Banks ◽  
The U.S

This chapter examines the rise of financial sanctions as a tool of U.S. foreign policy and the role of U.S. prosecutors in enforcing sanctions against global banks. It describes how the United States developed its financial sanctions capabilities against terrorist groups, then turned them against state actors such as North Korea, culminating with elaborate sanctions programs against Iran and Russia. It shows how U.S. federal and state prosecutors uncovered large-scale sanctions evasion efforts at numerous global banks that processed U.S. dollar payments. This enforcement campaign led to some of the largest criminal fines ever levied, and global banks such as HSBC and BNP Paribas agreed to implement U.S. sanctions and anti-money laundering controls in their worldwide operations, thus broadening the reach of U.S. policy. Although U.S. enforcement actions faced strong criticism by U.S. allies, banks facing large fines, negative publicity, and potential loss of access to essential U.S. dollar payment infrastructure complied with U.S. demands. Unlike other cases, U.S. sanctions did not lead to multilateral reforms, instead triggering efforts by sanctioned states and bystanders to reduce their dependence on the U.S. dollar and U.S. payment systems.

scholarly journals ESTIMACIÓN DE LA TASA DE INTERÉS NEUTRAL, DESEMPLEO E INFLACIÓN EN MÉXICO

2019 ◽  
Vol 79 (311) ◽  
pp. 35
Author(s):  
Armando Sánchez Vargas
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Gross Domestic Product ◽  
Simultaneous Equations ◽  
Interest Rate Parity ◽  
Transmission Mechanisms ◽  
Rate Parity ◽  
The Interest Rate ◽  
Simultaneous Equations System

<p>¿Cuáles son los mecanismos de transmisión que determinan a la tasa de interés neutral que sirve de referencia para establecer la postura de política monetaria del Banco Central? Se analiza el papel de la tasa de desocupación y la inflación en la determinación de la tasa de interés neutral. La conclusión es que el Banco de México podría tomar una postura de política monetaria más expansiva sin generar presiones inflacionarias. La tasa de interés se calcula con: 1) la regla de Taylor y un sistema de ecuaciones simultáneas cointegrado y 2) la paridad de tasas de interés. Los resultados sugieren que la tasa de interés neutral cambia a través de dos mecanismos: 1) de manera indirecta cuando se presenta una variación en la tasa de desocupación, lo que genera un cambio en la inflación y, por tanto, un desplazamiento de la tasa neutral, y 2) de manera directa cuando hay una reducción en la brecha del producto interno bruto.</p><p> </p><p align="center">ESTIMATION OF THE NEUTRAL INTEREST RATE, UNEMPLOYMENT AND INFLATION IN MEXICO</p><p align="center"><strong>ABSTRACT</strong></p>What are the transmission mechanisms determining the neutral rate of interest that serves as a reference to establish the monetary policy stance of the Central Bank? We analyze the role of unemployment and inflation in determining such neutral rate. We conclude that the Banco de México could take a more expansive monetary policy stance without generating inflationary pressures. The rate is calculated using two methods: 1) the Taylor rule and a cointegrated simultaneous equations system and 2) the interest rate parity. Our results suggest that the neutral interest rate changes through two mechanisms: 1) indirectly when there is a variation in the unemployment rate, which generates a change in inflation and, therefore, a shift in the neutral rate and 2) directly when there is a reduction in the Gross Domestic Product gap.

scholarly journals Does Uncovered Interest Rate Parity Hold After All?

2019 ◽  
Vol 24 (2) ◽  
pp. 49-72 ◽  
Author(s):  
Muhammad Omer ◽  
Jakob de Haan ◽  
Bert Scholtens
Keyword(s):  
Interest Rate ◽  
State Dependence ◽  
Short Term ◽  
Interest Rate Parity ◽  
Uncovered Interest Rate Parity ◽  
International Currencies ◽  
The Us ◽  
Exchange Rate Overshooting ◽  
Us Dollar ◽  
Rate Parity

This paper tests Uncovered Interest Rate Parity (UIP) using LIBOR rates for six major international currencies for the period January 2001 to December 2008. We find that UIP generally holds over a short-term (above 5-months) horizon for individual as well as groups of currencies. Our results suggest that it is important to consider the cross-correlation between currencies. We also find that “state dependence” plays an important role for currencies with a negative interest rate differential vis-à-vis the US dollar. This state dependence could also be instrumental in explaining exchange rate overshooting.

Role of affect in short-term memory for paired associates.

1968 ◽  
Vol 78 (3, Pt.1) ◽  
pp. 494-501 ◽  
Author(s):  
Calvin F. Nodine ◽  
James H. Korn
Keyword(s):  
Short Term Memory ◽  
Short Term ◽  
Term Memory ◽  
Paired Associates

The capacity of short term memory from an evolutionary perspective

2019 ◽  
Author(s):  
Majid Manoochehri
Keyword(s):  
Short Term Memory ◽  
Memory Span ◽  
Critical Role ◽  
Experimental Studies ◽  
Cognitive System ◽  
Evolutionary Approach ◽  
Evolutionary Perspective ◽  
Short Term ◽  
Term Memory

Memory span in humans has been intensely studied for more than a century. In spite of the critical role of memory span in our cognitive system, which intensifies the importance of fundamental determinants of its evolution, few studies have investigated it by taking an evolutionary approach. Overall, we know hardly anything about the evolution of memory components. In the present study, I briefly review the experimental studies of memory span in humans and non-human animals and shortly discuss some of the relevant evolutionary hypotheses.

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