Publications

Procyclicality in the financial system: Do we need a new macrofinancial stabilization framework?

in Kiel Economic Policy Papers no 2 Kiel Institute for World Economics, September 2005 and BIS Working Papers, no 193, January 2006

The successful pursuit of the objective of low inflation by central banks in recent decades has also delivered low variability of both inflation and output. At the same time, numerous financial and other “imbalances” (defined here as significant and sustained deviations from historical norms) have emerged. Should these imbalances revert to the mean, there could be significant effects on output growth. Although such an adverse outcome remains only a possibility, the question asked in this paper is whether we might still benefit from a new macrofinancial stabilisation framework in which monetary and regulatory policies gave more attention to avoiding the emergence of imbalances in the first place.

Jan2006_Procyclicality in the Financial System;work193.pdf

Posted by williamw in Publications

“Are changes in financial structure extending safety nets?”BIS Working Papers No 145

Significant attention has recently been directed to the optimal policy response when financial excesses threaten. This paper rather addresses issues pertinent to the appropriate policy response once financial difficulties have actually materialised. It begins with some empirical evidence concerning recent changes in financial structure (marketisation, globalisation and consolidation) and documents the rise in the number and variety of episodes of financial instability. The paper then goes on to examine the rationale for government intervention (use of safety net instruments) to reduce the costs of such financial instability, and cautiously concludes that the use of a number of such instruments has been on the rise. Moreover, the balance among them has also been changing. An attempt is then made to link these evolving policy responses back to the underlying changes in financial structure identified earlier. Since the use of safety net instruments always implies in principle some element of moral hazard, the paper concludes with an empirical evaluation of whether this seems to be a matter of practical importance, and whether “good design” might not have the potential to materially reduce such concerns. The conclusion reached is that sensible policies designed to contain the damage arising from financial instability can have less desirable longer-term consequences. Policymakers thus continue to face an inter-temporal optimisation problem.

Publication:  Bank For International Settlements Date:  2 February 2004 work145_Are changes in financial structure extended safety nets.pdf

Posted by williamw in Publications

International financial crises: prevention, management and resolution

Speech by William R White, Economic Adviser, Bank for International Settlements, at a conference on ‘Economic governance: the role of markets and of the State’, on the occasion of the Annual Congress of the Swiss Society of Economics and Statistics, Berne 20 March 2003.

Date:  20 March 2003 20032003_SpeechBerne.pdf

Posted by williamw in Publications

International financial crises: prevention, management and resolution

Speech by William R White, Economic Adviser, Bank for International Settlements, at a conference on ‘Economic governance: the role of markets and of the State’, on the occasion of the Annual Congress of the Swiss Society of Economics and Statistics, Berne 20 March 2003.

Date:  20 March 2003 20032003_SpeechBerne.pdf

Posted by williamw in Publications

Searching for price and financial stability: challenges for central bank statistical services

Speech by William R White, Economic Adviser and Head of the Monetary and Economic Department, Bank for International Settlements, at the Irving Fisher Committee conference on ‘Challenges to central bank statistical activities’, Basel, 21 August 2002

Date:  21 August 2002 21aug2002_Searching for price and financial stability.pdf

Posted by williamw in Publications

Recent initiatives to improve the regulation and supervision of private capital flows

BIS Working Papers no.92, June 2000; and in Crisis prevention and response : where do we stand with the debate on reform of the international financial architecture?

In this paper, an attempt is made to put the changing attitudes of policymakers towards international capital flows into a broader economic and historical context. The paper then goes on to suggest that policymakers today wish, on the one hand, to achieve the benefits of freer capital flows while trying to minimise the risks they pose on the other. Various suggestions for achieving the second objective are then critically evaluated. While most seem to have merit, no single suggestion would seem sufficient in itself to avoid all problems. As in many areas having to do with crisis prevention, incremental progress across a broad front would seem warranted.

work92.pdf

Posted by williamw in Publications