Bank capital, and a bank’s liquidity position, are concepts that are central to understanding what banks do, the risks they take and how best those risks should be mitigated. This article provides a primer on these concepts. It can be misleading to think of capital as ‘held’ or ‘set...

ABSTRACT The financial crisis has demonstrated the need for a set of macroprudential policy tools that can be used to mitigate systemic risk. Focusing on the UK, our paper reviews the performance of the Basel III credit‐to‐GDP gap that, alongside judgement, is to be used as a reference guide...

Increasing demand for collateral assets in the aftermath of the financial crisis has raised concerns about a shortage of high-quality assets (HQA). Drawing on a recent report by the Committee on the Global Financial System, we argue that such concerns seem unjustified. In aggregate, the increase...

This paper presents a framework to assess the relative importance of three key sources of productivity growth that research on international trade focuses on: (i) inter-industry specialisation; (ii) intra-industry reallocation of resources across heterogeneous firms, including firm entry and...

Welfare gains from increasing product variety are an important  source of the gains from international trade. Recent empirical studies have largely focused on measuring the gains from an increased variety of imports. Trade theory, however,  suggests that international trade heavily affects the...

Some observers argue that increased real integration has led to greater co-movement of prices internationally. We examine the evidence for cross-border price spillovers among economies participating in the pan-Asian cross-border production networks. Starting with country-level data, we find that...

In this paper, we first document that two predictions of the heterogeneous firm version of the Dornbusch (1987) pricing model are confirmed in micro data on US import prices: while the rate at which a firm reacts to changes in its own cost is U-shaped in market share, the rate at which it reacts...

This paper starts by showing that in the European car industry, there exist cross-country taste differences along the product attribute dimension that signifcantly drive net trade patterns and reduce the volume of trade. Further it is shown that, after the creation of the European common market,...