This paper links banking with asset prices in a dynamic macroeconomic model, to provide a simple characterization of financial instability. In contrast with historical bank runs, recent banking crises were driven by deteriorating bank assets. Hence, in contrast with bank run models, this paper...

Correspondent banks have been paring back their cross-border banking relationships for the past decade. The retreat is broad-based, but affects some countries more than others. Jurisdictions with weaker governance and deficient controls to prevent illicit financing have lost more relationships,...

How does the management and resolution of the current crisis compare with the response of the Nordic countries in the early 1990s, widely regarded as exemplary? We argue that, while intervention has been prompter, the measures taken so far remain less comprehensive and in-depth. In particular,...