BIS Working Papers No 333 Banking crises and the international monetary system in the Great Depression and now ppt

... fall in the labour share in national income, a decline in investment income and diminished net income transfers. It is first and foremost the consequence of a declining labour share in the economy, ... renminbi may depress the real purchasing power of Chinese household income, resulting in excess or even forced saving. Another view suggests a minor and uncertain role of the exchange rate in the ... of housing reforms in the People’s Republic of China, ADB Economics Working Paper, No 198, April. Garnaut, R (2006): The turning point in China’s economic development”, in R Garnaut and L...

... BIS Working Papers are written by members of the Monetary and Economic Department of the Bank for International Settlements, and from time to time by other economists, and are published ... published by the Bank. The papers are on subjects of topical interest and are technical in character. The views expressed in them are those of their authors and not necessarily the views of the BIS. ... determinant of the transmissionmechanism through the banking system. A corollary is that the prevailing level of interest rate, and not just their expectation in the future, matters to the extent...

... significant in the second subperiod, and, in addition, increased sharply from 0.37 to 0.60. This is in line with findings in other studies about the global effects of quantitative monetary policy easing ... combines the traditional VAR approach that treats all the variables in the system as endogenous and the panel-data approach that allows for unobserved individual heterogeneity. Expanding a standard ... already noted, the recent crisis has led to important changes in the behaviour of international investors as well as in the global monetary and financial environment. Could this have changed the...

... sign and the effect is amplified during the period of the financial crisis: in normal times, a one percentage point increase in the monetary interest rate causes a 1.6% drop in lending. The ... banks in the sample is largest in the United Kingdom, Belgium and Sweden and smallest in Finland. At the same time, the average size of US banks is not very large because there is more information ... other economists, and are published by the Bank. The papers are on subjects of topical interest and are technical in character. The views expressed in them are those of their authors and not...

... few,ifany,institutionswithahighratingfailedwithinayearafter the ratingswerepublished.Althoughnotalllow‐ratedinstitutionssubsequentlyfailed, the failurerateoflow‐ratedinstitutionswasveryhigh,validatingourviewthattheyareatriskoffailure,especially in adeeprecessionor depression.  In 1987,WeissResearchpurchased the Holtbankratingsdatabase and quantitativemodels,incorporatingelementsofitsownqualitativebankratingsmethodology and publishingtheseunder the bannerofWeissSafetyRatings. In its1994study,InsuranceRatings:ComparisonofPrivateAgencyRatingsforLife/HealthInsurers,3 the U.S.GeneralAccountabilityOffice(GAO)reviewed the Weissratingsscale(fromAtoF) and determinedthataWeissSafetyRatingofD+orlowerdenotesinstitutionsthatare“vulnerable”tofuturefinancialfailures.Further, the highpercentageofcompaniesratedD+orlowerthatsubsequentlyfailedagainvalidated the generalaccuracyofthatdesignation.Although the GAOwasreferringtoadifferentindustry(life and healthinsurers), the Weissratingsscalewasdesignedtoconvey the samesignificanceacrossvariousfinancialindustries,includingcommercialbanks,savingsbanks, and savings and loanassociations. In 2006, the NewYorkmediafirmTheStreet.compurchased the WeissRatings, now calledFinancialStrengthRatings.However,TheStreet.comratingsscale(AthroughF)is the sameas the earlierWeissratingsscale,while the ratingsmethodologyhasremainedvirtually the sameaswell. Now, for the purposesofthispaper,TheStreet.comhasprovidedalistofallrateddepositoryinstitutionswithaFinancialStrengthRatingofD+(weak)orlower.4 And basedon the backgroundcitedabove,webelieve the listisbothmorecomprehensive and moreaccuratethan the FDIC’s.5From the list,WeissResearchfindsthat: ... The federalgovernmentwouldnotnecessarilyintervenejusttokeepamajorOTCderivativesdealerfromfailing,buttoavertacrisis, the FederalReservemayberequiredtoserveaslenderoflastresorttoanymajorU.S.OTCderivativesdealer,whetherregulatedorunregulated.” In responseto the GAO’s1994warningsabove, the financialindustry’sresponsewasbothaudible and caustic.MajorWallStreetfirmspushedbackwithconcertedlobbyingeffortstoblockanyregulatorychangesat the pass,while“ChickenLittle”accusationswereleveledat the authors,Congressionalrequestersof the study, and anyindependentfirm,suchasWeissResearch,thatmadeforecastsbasedonitsconclusions.7 The industry’sprimaryargument in defenseofderivativeswasthattheyhelpedtoreduceriskthroughhedging, and thateachderivativespositionwasgenerallybalancedagainstoffsettingpositions.However,manylargefinancialinstitutions—suchasBearStearns,LehmanBrothers,MerrillLynch and the AmericanInsuranceGroup(AIG)—wentfarbeyondhedging,transformingtheirderivativesdivisionsintomajorprofitcentersbasedonspeculativetrading.Moreover,theydidnotadequatelyprotectthemselvesagainstdefaultsbytheirtradingpartnersoranticipate the severityof the system riskstressedby the GAO.Subsequently,asdetailed in the GAO’sfollow‐upreport,FinancialDerivatives:ActionsTakenorProposedSinceMay1994,8some,mostlycosmetic,changesweremade.Buttheydidnothingtoslow the meteoricgrowthof the veryinstruments and practicesthat the GAOidentifiedasposing the greatestthreatstofinancialinstitutions and the financial system. Specifically, In its1994study, the GAOreported, The bestavailabledataindicatethat the totalvolumeofworldwidederivativesoutstandingasofyear‐end1992wasatleast$12.1trillion in termsof the notional,orprincipal,amountofderivativescontracts.”Although the GAOrecognizedthat the $12.1trillionoverstated the actualrisk,italsostatedthat“firmsthatusederivativescansustainsignificantlosses,”implyingthat$12.1trillionwasalreadyconsideredadangerouslylargenumber.However,thatnumberpales in comparisonto the latesttallyofnotionalOTCderivativesby the Bankof International Settlements (BIS) .9Atmid‐year2008, the BIS reported$683.7trillion,or56.5times the levelreportedby the GAOfor1992.Worse,amongthesewere$57.3trillion in creditdefaultswaps,orbetson the failureofnamedcorporations.Thesecontractsarewidelyrecognizedas the highestriskcategoryofderivatives and aredirectlyresponsibleforthedemiseofAIG,oneof the largestthreatsto the globalfinancial system today.7 In SafeMoneyReport,Issue#294,October2,1998,wewrote“Evenas the Dowmakesnewhighs,WallStreet and the world’sfinancialmarketssitatopagiganticmountainofderivatives—high‐riskbets and debtsthattotalamind‐boggling$285trillion.”http://www.martinweiss.com/images/PDF/SMR/SMR294.pdf.Similarly, in SafeMoneyReport,Issue#391,November2006,wewrote“It’saglobalVesuviusthatcoulderuptatalmostanytime,instantlythrowing the world’sfinancialmarketsintoturmoil ... $36,405,06023However,ifthisglobalstructureisshaky,neitherafuturefailureofAIGnor the 2008bankruptcyofLehmanBrotherscanbeproperlyconstruedas the underlyingcause.Rather,theyaremerelypotentialtriggersofaglobalcollapse. The underlyingcausesofglobalinstabilityaremanyyearsofoverborrowing and undersaving,plus the cumulativeweightof the U.S.housingbust,mortgagemeltdown,widespreaddeleveraging in the financial system, and the deepesteconomicdownturnsince the Great Depression. Meanwhile, the potentialtriggersofaglobalcollapseareubiquitous—notlimitedtojustoneortwofirmssuchasAIGorLehmanBrothers.Aswedemonstrate in thispaper, in the banking industryalone,thereareatleastfourmegabanks and thousandsofsmallerinstitutionsatrisk.Thus,althoughabundanttaxpayerfundsmaylockdownsomeof the potentialtriggerssomeof the time,itisunreasonabletoexpect the governmenttosilenceall the gunsall the time.24PartIVU.S.CommercialBanksAreVulnerabletoContagionDespiteExpandedDepositInsuranceOnejustificationoftencitedprivately— and sometimespublicly—forgovernmentactionstoavertlargebankfailuresis the concernthat...

... desponding friends have imagined; and that, whatever maybe the change in the sentiments of the higher classes, and the ignorantapathy of the lowest, the middle ranks, in whom the great mass of infor-mation, ... top from the gentry and nobilitynot so much by lower incomes as by the necessity of earning theirliving, and at the bottom from the labouring poor not so much byhigher incomes as by the property, ... surprize the thinking mind than the little attention which is paid in thiscountry to the morals of the profligate and the poor’ (7 (1790):438). Noting that ‘to excite the spirit of industry, and...

... the ICU clinical director, according to anadapted scale [9-11]. Minor errors were classified as thosecausing no harm or an increase in patient monitoring with no change in vital signs and no ... dur-ing the CPOE prescribing period. The patient outcome scores are given in Tables 2 and 3. Mostof the errors were minor in outcome, although two non-inter-cepted errors with CPOE led to an increased ... amphoter-icin was intended. The doses of these two products are notinterchangeable and the high dose prescribed would havebeen nephrotoxic. In the third case, vancomycin was pre-scribed 1 g intravenously...

... of the members were born. The find continues because neither family is ready to forgive and forget the past. The people are involved because the families do not keep the find in secrecy of their ... many people in this world know, true love knows no limits, and when two lovers become entirely entrapped with their love, they become oblivions as to what in going on in the rest of their lives. ... growing power of money, and the injustice caused by it. The second period which last from the middle of the 16th century up to the beginning of the 17th century saw the flourishing of the...

... implementinga quality management system and to continually improve the effectiveness of the quality management system. They also have to define their roles in maintaining and developing quality ... words in English : Sorting, Straightening, Sweeping,Standardizing and Sustaining the discipline. It is a structured program to systematicallyachieve total organization, cleanliness, and standardization ... 0918.775.368ACKNOWLEDGEMENTThank to the time studying and practicing in National Economic University and the time doing internship in Viet A plastic and composite company, I have learned and collected...

... denotes a body of sharedknowledge, that is, what people “must know in order to act as they do, make the things theymake, and interpret their experience in the distinctive way they do” (Quinn ... with others. The concept include a group’sway of thinking, feeling, and acting, and fixed patterns for doing certain things. According to Thompson (1990:132), the pattern meaning embodied in ... speak and sometimes they translate on aword-by-words basis. They apply the way they think in their mother tongue to form speech in English and pay no attention to the meaning beyond the words. The...