BIS Quarterly Review, December 2014
The BIS Quarterly Review for December 2014: Buoyant yet fragile?
Remarks by Mr Claudio Borio, Head of the Monetary and Economic Department, and Mr Hyun Shin, Economic Adviser & Head of Research, at the media briefing on 5 December 2014.
International banking and financial market developments
Special features
A long-standing puzzle in international finance is the durability of the dollar's share of foreign exchange reserves - which remains above 60%, while the weight of the US economy in global output has fallen to less than a quarter. We argue that the dollar's role may reflect instead the share of global output produced in countries with relatively stable dollar exchange rates - the "dollar zone". If a currency varies less against the dollar than ...
More...Even when securitised assets are simple, transparent and of high quality, risk assessments will be uncertain. This will call for safeguards against potential undercapitalisation. Since the uncertainty concentrates mainly in securitisation tranches of intermediate seniority, the safeguards applied to these tranches should be ...
More...We identify three business models using balance sheet characteristics of 222 international banks and a data-driven procedure. We find that institutions engaging mainly in commercial banking activities have lower costs and more stable profits than those more heavily involved in capital market activities, mainly trading. We also find that ...
More...Non-financial corporations from emerging market economies (EMEs) have increased their external borrowing significantly through the offshore issuance of debt securities. Having obtained funds abroad, the foreign affiliate of a non-financial corporation could transfer funds to its home country via three channels: it could lend directly to its headquarters (within-company flows), extend credit to unrelated companies (between-company flows) or make a cross-border deposit in a ...
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