The exchange rates between the currencies of European Monetary System (EMS) members are essentially fixed between narrow bands mandated by the Exchange Rate Mechanism (ERM). the intent of such a fixed rate regime is to enhance policy co-ordination within the EMS. However, it has instead led to...

A review of recent developments in the Chinese bond market shows that China's private debt market, an important source of financing to foster economic growth, remains relatively small despite recent reforms. Investors at an information disadvantage demand a risk premium to lend money (i.e., buy...

Bank regulatory design relies critically on bank risk modeling. Traditionally, the bank's aggregate value is assumed to obey an exogenously specified process (e.g., a lognormal diffusion). We demonstrate that this assumption is generally invalid given the truncated and correlated payoff...