Risky banks and macro-prudential policy for emerging economies
| Autor: | Gabriel Cuadra, Victoria Nuguer |
|---|---|
| Rok vydání: | 2018 |
| Předmět: |
Economics and Econometrics
050208 finance 05 social sciences Financial intermediary Principal–agent problem Monetary economics Market economy 0502 economics and business Financial crisis Dynamic stochastic general equilibrium Economics Balance sheet 050207 economics Volatility (finance) Macro Emerging markets |
| Zdroj: | Review of Economic Dynamics. 30:125-144 |
| ISSN: | 1094-2025 |
| DOI: | 10.1016/j.red.2018.05.001 |
| Popis: | We develop a two-country DSGE model with financial intermediaries to analyze the role of cross-border bank flows in the transmission of a U.S. bank's balance sheet shock to emerging market economies (EMEs). In the model, banks in both countries face an agency problem when borrowing from domestic households. EME banks might also be constrained in borrowing from U.S. banks, what we call risky EME banks. A negative quality of capital shock in the United States generates a global financial crisis. EME's macro-prudential policy that targets non-core liabilities (cross-border bank flows) makes the domestic economy resilient to the volatility of cross-border bank flows and makes EME's households better off. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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