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trade Featured Finance News World

The trade imbalance network and currency fluctuations

In recent years, concerns over global financial fragmentation have grown amid rising geopolitical tensions. This column integrates a network structure in a multi-country model with imperfect financial markets to study how currency risk premia are connected to financiers’ risk bearing capacity. Guided by the theory, it constructs a centrality-based characteristic that gives a direct role […]

World Featured Finance media News

Managing credit in dollarised economies: The effective but asymmetric effects of foreign currency reserve requirements

Emerging markets with partially dollarised financial systems are particularly vulnerable to global financial cycles. This column examines how reserve requirements on foreign currency deposits can help mitigate credit booms induced by capital inflows. Focusing on Peru between 2008 and 2017, the authors combine microdata with a calibrated macro model to show that foreign currency reserve […]

World Economy Featured News

Monetary policy spillovers in the global economy

Over and over in the history of the international monetary system, national policymakers have pointed to – and voiced concerns about – the effects of policy actions undertaken in foreign countries on the outlook and financial conditions in their own domestic economies. The most recent example involves the spillovers of tighter monetary policies to address […]