BIS Quarterly Review, March 2016

The Federal Reserve's interest rate lift-off in December did little to disturb the uneasy calm that had reigned in financial markets in late 2015. But the new year had a turbulent start, featuring one of the worst stock market sell-offs since the financial crisis of 2008. At first, markets focused on slowing growth in China and vulnerabilities in emerging market economies (EMEs) more broadly. Increased anxiety about global growth drove the price of oil and EME exchange rates sharply lower and ... More...

International financing, as measured by the BIS global liquidity indicators (GLIs), slowed in the second half of 2015. Aggregate international bank credit in the third quarter declined compared with a year earlier. The stock of international debt securities grew in the year to December 2015, but at a slower pace than in recent years. US dollar credit to non-bank borrowers outside the United States stood at $9.8 trillion in September 2015, essentially unchanged from the previous reading in June. Dollar borrowing by non-banks in emerging market economies (EMEs) stood at ... More...

Since mid-2014, four central banks in Europe have moved their policy rates into negative territory. These unconventional moves were by and large implemented within existing operational frameworks. Yet the modalities of implementation have important implications for the costs of holding central bank reserves. The experience so far suggests that modestly negative policy rates transmit through to ... More...

This feature explores the recent evolution of household wealth inequality in advanced economies by looking at valuation effects on household assets and liabilities. Using household survey data, we analyse the possible drivers of wealth inequality and the potential effect of monetary policy through its impact on interest rates and asset prices. Our simulation suggests that wealth inequality has risen since ... More...

This feature explores the resilience of banks' balance sheets after the 2008-09 financial crisis through the lens of a unique global data set crossing bank nationality and host country. We start by documenting post-crisis changes in the structure of BIS reporting banks' global operations across bank nationalities. We then zero in on the funding mix of banks' foreign affiliates (branches and subsidiaries) on the eve of the crisis, and how it ... More...

This article explores drivers and implications of the rising use of electronic and automated trading in fixed income markets - a process we refer to as "electronification". We take stock of the current state of electronic trading and how it has changed the market ecosystem, its resilience and its overall functioning. We argue that the impact of electronic and automated trading is ... More...