Claudio Borio
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View article: New age of central banking in emerging markets
New age of central banking in emerging markets Open
The book New Age of Central Banking in Emerging Markets offers a comprehensive view of the central bank challenges of our times. It explores the importance of price stability, the most pressing macroeconomic challenge facing central banks …
View article: Global and domestic financial cycles: variations on a theme
Global and domestic financial cycles: variations on a theme Open
We compare and contrast two prominent notions of financial cycles: a domestic variant, which focuses on how financial conditions within individual economies lead to boom-bust cycles there; and a global variant, which highlights how global …
View article: Post-Crisis International Financial Regulatory Reforms: A Primer
Post-Crisis International Financial Regulatory Reforms: A Primer Open
This paper reviews post-crisis financial regulatory reforms, examines how they fit together and identifies open issues. Specifically, it takes stock of the salient new features of bank and CCP international standards within a unified analy…
View article: Central banking in challenging times
Central banking in challenging times Open
Since the Great Financial Crisis, central banks have been facing a triple challenge: economic, intellectual and institutional. The institutional challenge is that central bank independence - a valuable institution - has come in for greater…
View article: Predicting recessions: financial cycle versus term spread
Predicting recessions: financial cycle versus term spread Open
Financial cycles can be important drivers of real activity, but there is scant evidence about how well they signal recession risks. We run a horse race between the term spread - the most widely used indicator in the literature - and a rang…
View article: Monetary policy hysteresis and the financial cycle
Monetary policy hysteresis and the financial cycle Open
A long tradition of macroeconomic analysis accords monetary policy only a transient role in driving real outcomes. At the same time, a large body of evidence highlights the persistent impact of financial cycles, particularly those that end…
View article: Bank Intermediation Activity in a Low Interest Rate Environment
Bank Intermediation Activity in a Low Interest Rate Environment Open
This paper investigates how a prolonged period of low‐interest rates affects bank intermediation activity. We use data for 113 large international banks headquartered in 14 major advanced economies during the period 1994–2015. We find that…
View article: What anchors for the natural rate of interest?
What anchors for the natural rate of interest? Open
The paper takes a critical look at the conceptual and empirical underpinnings of prevailing explanations of low real (inflation-adjusted) interest rates over long horizons and finds them incomplete. The role of monetary policy, and its int…
View article: The financial cycle and recession risk
The financial cycle and recession risk Open
Financial cycle booms can end in crises and, even if they do not, they tend to weaken growth. Given their slow build-up, do they convey information about recession risk? We compare the predictive performance of different financial cycle pr…
View article: On money, debt, trust and central banking
On money, debt, trust and central banking Open
This essay examines in detail the properties of a well functioning monetary system - defined as money plus the mechanisms to execute payments - in both the short and long run, drawing on both theory and the lessons from history. It stresse…
View article: Unconventional monetary policies: a re-appraisal
Unconventional monetary policies: a re-appraisal Open
We explore the effectiveness and balance of benefits and costs of so-called "unconventional" monetary policy measures extensively implemented in the wake of the financial crisis: balance sheet policies (commonly termed "quantitative easing…
View article: Early Warning Indicators of Banking Crises: Expanding the Family
Early Warning Indicators of Banking Crises: Expanding the Family Open
Household and international debt (cross-border or in foreign currency) are a potential source of vulnerabilities that could eventually lead to banking crises. We explore this issue formally by assessing the performance of these debt catego…
View article: Monetary policy in the grip of a pincer movement
Monetary policy in the grip of a pincer movement Open
Monetary policy has come under strain since the global financial crisis (GFC) of 2007–09. Once the GFC broke out central banks’ swift and determined response was essential to stabilise markets and to avoid a self-reinforcing downward spira…
View article: Is monetary policy less effective when interest rates are persistently low
Is monetary policy less effective when interest rates are persistently low Open
Is monetary policy less effective in boosting aggregate demand and output during periods of persistently low interest rates? This paper reviews the reasons why this might be the case and the corresponding empirical evidence. Transmission c…
View article: The influence of monetary policy on bank profitability
The influence of monetary policy on bank profitability Open
This paper investigates how monetary policy affects bank profitability. We use data for 109 large international banks headquartered in 14 major advanced economies for the period 1995–2012. Overall, we find a positive relationship between t…
View article: Monetary Policy and Bank Lending in a Low Interest Rate Environment: Diminishing Effectiveness?
Monetary Policy and Bank Lending in a Low Interest Rate Environment: Diminishing Effectiveness? Open
This paper analyses the effectiveness of monetary policy on bank lending in a low interest rate environment. Based on a sample of 108 large international banks, our empirical analysis suggests that reductions in short-term interest rates a…
View article: The Globalisation of Inflation: the Growing Importance of Global Value Chains
The Globalisation of Inflation: the Growing Importance of Global Value Chains Open
Greater international economic interconnectedness over recent decades has been changing inflation dynamics.This paper presents evidence that the expansion of global value chains (GVCs), ie cross-border trade in intermediate goods and servi…
View article: Rethinking potential output: embedding information about the financial cycle
Rethinking potential output: embedding information about the financial cycle Open
This paper argues that information about the financial cycle should be incorporated in measures of potential output. Identifying potential output with non-inflationary output is too restrictive given that growing financial imbalances can p…
View article: Monetary Policy, the Financial Cycle and Ultra-low Interest Rates
Monetary Policy, the Financial Cycle and Ultra-low Interest Rates Open
Do the prevailing unusually and persistently low real interest rates reflect a decline in the natural rate of interest as commonly thought? We argue that this is only part of the story. The critical role of financial factors in influencing…
View article: Fiscal sustainability and the financial cycle
Fiscal sustainability and the financial cycle Open
A frequently neglected aspect of financial booms and busts - financial cycles - is their impact on fiscal positions. And yet, the latest financial crisis and history show that these cycles can wreak havoc with public finances. After review…
View article: Labour reallocation and productivity dynamics: financial causes, real consequences
Labour reallocation and productivity dynamics: financial causes, real consequences Open
We investigate the link between credit booms, productivity growth, labour reallocations and financial crises in a sample of over twenty advanced economies and over forty years. We produce two key findings. First, credit booms tend to under…