Banks and government bonds: A love story
European banks have been criticised for holding too much domestic government debt during the recent euro area crisis, intensifying the doom loop...
Dollars or Pence? Choosing a framework for US-China trade
Given that China is a strategic and economic rival to the US, the Trump administration’s framework for US-China trade makes far more sense than one...
Systemic consequences of outsourcing to the cloud
Financial institutions are increasingly outsourcing information technology to the cloud, motivated by efficiency, security, and cost. This column...
Longterm decision making under the threat of earthquakes?
Under the threat of earthquakes, long-term policy makers need tools to optimally decide on the economic trajectories that will maximize the society...
The dissonance of the short and long term
The type of risk we most care about is long-term, what happens over years or decades, but we tend to manage that risk over short periods. This column...
Central banks and reputation risk
As central banks accumulate ever more job functions, their reputation risk increases. This column offers a cautionary tale from Iceland where, after...
Financial crises and liberalization: Progress or reversals?
Financial crisis can trigger policy reversals, i.e. they can lead to a process of reregulation of financial markets. Using a recent comprehensive...
The Efficient IPO Market Hypothesis: Theory and Evidence
We derive the optimal underwriting method and the quantitative IPO pricing rule that this method implies in a market with informational frictions...
Lending cycles and real outcomes: Costs of political misalignment
Government ownership of banks can help solve credit market failures and stabilise the supply of credit over the business cycle. However, it can also...
Reconstructing and Stress Testing Credit Networks
Financial networks are an important source of systemic risk, but often only partial network information is available. In this paper, we use data on...
Reconstructing and Stress Testing Credit Networks
Financial networks are an important source of systemic risk, but often only partial network information is available. In this paper, we use data on...
The Wealth Effect: How the Great Expectations of the Middle Class Have Changed the Politics of Banking Crises
The politics of major banking crises has been transformed since the nineteenth century. Analyzing extensive historical and contemporary evidence...
Financial Transaction Taxes and the Informational Efficiency of Financial Markets: A Structural Estimation
We develop a new methodology to estimate the impact of a financial transaction tax (FTT) on informational efficiency, liquidity and volatility. In our...
Cryptocurrencies: Policy, economics and fairness
Cryptocurrencies promise to replace fiat money with private money whose integrity is underpinned by algorithms, not government guarantees. While the...
Domestic banks as lightning rods? Home bias and information during Eurozone crisis
European banks have been criticized for holding excessive domestic government debt during economic downturns, which may have intensified the diabolic...
