This paper investigates empirically three potential drivers of financial imbalances ahead of the global financial crisis: rising global imbalances (capital flows); loose monetary policy; and inadequate supervision and regulation. We perform panel data regressions for OECD countries from 1999 to...

This paper assesses the impact of introducing an efficient payment system on the amount of credit provided by the banking system. Using payment system reforms in Eastern European countries over the 1995–2005 period as a natural experiment, we find evidence that payments reforms were an...

This paper assesses the impact of introducing an efficient payment system on the amount of credit provided by the banking system. Two channels are investigated. First, innovations in wholesale payments technology enhance the security and speed of deposits as a payment medium for customers and...

Discusses the recently published draft standard from the Bank of England that covers most controversial banking regulatory areas. States that there may well be advantages in a fair value approach for banks but disclosure of fair values would probably be preferable. Looks at the S&L crisis in the...

The Basel Committee on Banking Supervision is proposing to introduce, in 2006, new risk-based requirements for internationally active (and other significant) banks. These will replace the relatively risk-invariant requirements in the current Accord. The new requirements for the largest bank will...

Explains why financial stability is important for official policy: its disruption leads to huge economic costs. Analyses why the involvement of the public sector is necessary to ensure stability; market self‐interest is not sufficient because of externalities, meaning that individual firms’...