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on Financial Development and Growth |
| By: | Yakubu, Ibrahim Nandom; Bunyaminu, Alhassan; Abdulrahman, Nuhu Alhassan |
| Abstract: | This study investigates the impact of stock market development and foreign private investment on economic growth in Sub-Saharan Africa (SSA) over the period 2000-2017. The study controls for the impact of trade openness and inflation. Using the pooled estimated generalized least squares (EGLS) technique, we establish that there exists a negative relationship between stock market development and economic growth in Sub-Saharan Africa. We note that foreign private investment positively and significantly influences economic growth. The study further reveals that inflation negatively affects growth. We present key implications for policy based on the findings. |
| Keywords: | Stock market development, Foreign private investment, Economic growth, SSA |
| JEL: | E22 F21 F23 O16 |
| Date: | 2022–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:115184&r=fdg |
| By: | Guivis Zeufack Nkemgha (University of Bamenda, Bamenda, Cameroon); Tii N. Nchofoung (University of Dschang, Cameroon); Fabien Sundjo (University of Bamenda, Bamenda, Cameroon) |
| Abstract: | Examining the value-added link between infrastructure and industrialization is fundamental to achieving Sustainable Development Goal (SDG) 9, which consists of building resilient infrastructure, promoting inclusive and sustainable industrialization and fostering innovation. The objectives of this paper are to analyse the effect of infrastructures on industrialisation and how financial development and human capital modulate this effect in 33 African countries during the period 2003-2019 through the system GMM methodology. The results show that infrastructural development has a direct enhancing effect on industrialisation in Africa. When the indirect effect regressions through the modulating effects of financial development and human capital are considered, the net effects are equally positive though the results vary across the different specifications of infrastructure and the specific transmission channel considered. For instance, the indirect effect through the interaction of electricity and transport infrastructures with financial development and human capital produced a negative net effect. The thresholds of financial development and human capital required to nullify these negative effects are provided and practical policy implications are discussed. |
| Keywords: | infrastructures, industrialization, financial development, human capital |
| JEL: | H54 L60 O55 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:exs:wpaper:22/091&r=fdg |
| By: | Florian Léon (FERDI - Fondation pour les Etudes et Recherches sur le Développement International) |
| Abstract: | This paper examines public bank lending in Africa in times of crisis. To do so, we exploit an original data set covering all banks operating in eight West African countries. The final sample considers 112 banks, including 24 public banks, over the period 2000-2019. We focus on how public banks react during and in the three years after macroeconomic shocks. Our empirical analysis provides the following results. First, lending activity is reduced in the wave of a crisis. Second, public and private banks do not differ in their lending decisions during a downturn. However, public banks do not reduce their activity in years following a crisis, contrary to domestic private banks. Third, the most probable explanation of the previous finding is the stability of the resources of public banks, especially deposits. Finally, the countercyclicality of public banks does not come at the expense of the degradation of public banks' health. |
| Keywords: | Public banks,Lending,Countercyclicality,Africa |
| Date: | 2022–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03815322&r=fdg |
| By: | Araujo, Luis (Michigan State University, Department of Economics); Hong, David (Michigan State University, Department of Economics); Kokas, Sotirios (University of Essex); Minetti, Raoul (Michigan State University, Department of Economics) |
| Abstract: | Banking is increasingly a complex activity. We investigate the output and welfare consequences of banking structures in an economy where lenders use information to screen investment quality and to recover value from failed investments. Complex banking (lenders’ joint production of information) eases information production but also facilitates the detection and liquidation of fragile investments. We find that complex banking enhances the resilience to small investment shocks but can amplify the output and welfare responses to large negative shocks. A larger complexity of investments preserves the stabilizing properties of complex banking following small shocks, but increases the chances that complex banking harms welfare after large shocks. The predictions are broadly consistent with evidence from matched bank-firm US data. |
| Keywords: | Information; Banking; Investment Complexity |
| JEL: | D83 E44 |
| Date: | 2022–07–11 |
| URL: | http://d.repec.org/n?u=RePEc:ris:msuecw:2022_004&r=fdg |
| By: | Radoslaw Stefanski; Alex Trew |
| Abstract: | The interest rate has been falling for centuries. A process of natural selection that leads to increasing societal patience is key to explaining this decline. Three observations support this mechanism: patience varies across individuals, is inter-generationally persistent, and is positively related to fertility. A calibrated dynamic, heterogenous-agent model of fertility permits us to isolate the quantitative contribution of this mechanism. Selection can explain most of the decline in the interest rate, a fact that is robust to a number of model extensions. Quantitative implications are consistent with other facts, such as the steady increase in the investment rate since 1300. |
| Keywords: | Interest rates; selection; fertility; patience; heterogenous agents |
| JEL: | E21 E43 J11 N30 O11 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:gla:glaewp:2022_08&r=fdg |
| By: | Gonzalez-Aguado, Eugenia |
| Abstract: | There has been a growing concern about the vulnerability of emerging countries to fluc-tuations in international interest rates. Empirical evidence shows that these countries suffer significant output drops when developed countries raise their interest rates. In this paper, I document that an important determinant of the magnitude of this effect is the ability of coun-tries to issue sovereign debt domestically, rather than to external creditors. Moreover, I find that the level of financial development of domestic markets is positively related to the share of total public debt that is domestically held. I build a model that integrates a domestic banking sector into a sovereign default model where governments can issue domestic and external debt and decide whether to default on debt selectively. Due to financial frictions, issuing domestic debt crowds out investment in capital. As financial markets develop, crowding-out costs decrease, and banks demand lower interest rates on domestic bonds. Both effects reduce the relative cost to the government of borrowing domestically, leading to a higher share of domestic debt. The results of the quantitative solution of the model are consistent with the patterns of vulnerabil-ity to world interest rates and sovereign debt composition observed in the data. I show that financial development, through a less costly access to domestic debt, decreases the vulnerability of emerging economies to external shocks. |
| Keywords: | Sovereign debt; Interest rates; International spillovers; Financial development |
| JEL: | E44 F34 F42 |
| Date: | 2022–11–04 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:127468&r=fdg |
| By: | Marcin Kolasa (SGH Warsaw School of Economics and International Monetary Fund); Grzegorz Wesołowski (University of Warsaw, Faculty of Economic Sciences) |
| Abstract: | Large international capital movements tend to be associated with strong fluctuations in asset prices and credit, contributing to domestic financial cycles and posing challenges for stabilization policies, especially in emerging market economies. In this paper we argue that these challenges are particularly severe if the global financial cycle is driven by quantitative easing (QE) in the US, and when the local banking sector has large holdings of government bonds, like in many Latin American (LA) countries. We first investigate empirically the impact of a typical round of QE by the US Fed on LA economies, finding a persistent expansion in credit to households and house prices as well as a significant loss of price competitiveness in this group of economies. We next develop a quantitative macroeconomic model of a small open economy with segmented asset markets and banks, which accounts for these observations. In this framework, foreign QE creates tensions between macroeconomic and financial stability as a contractionary impact of exchange rate appreciation is accompanied by booming credit and house prices. As a consequence, conventional monetary policy accommodation aimed at stabilizing output and inflation would further exacerbate domestic financial cycle. We show that an effective way of resolving this trade-off is to impose a time-varying tax on capital inflows. Combining foreign exchange interventions with tightening of local credit policies can also restore macroeconomic and financial stability, but at the expense of a large redistribution of wealth between borrowers and savers. |
| Keywords: | quantitative easing, global financial cycle, domestic credit, exchange rate interventions, capital controls, macroprudential policy |
| JEL: | E44 E58 F41 F42 F44 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:war:wpaper:2022-15&r=fdg |
| By: | Carlos Cantù; Catherine Casanova; Rodrigo Alfaro; Fernando Chertman; Gerald Cisneros; Toni dos Santos; Roberto Lobato; Calixto Lopez; Facundo Luna; David Moreno; Miguel Sarmiento; Rafael Nivin |
| Abstract: | We explore the mechanism that links capital inflows from abroad with domestic bank lending. Five Latin American countries use their credit registry data to examine the changes in outstanding loans and prices that are charged by banks with different balance sheet characteristics. Our meta-analysis sums up their results. We find that high capital inflows generally induce weak banks to relax their lending standards. For the most vulnerable market segment, where weak banks lend to risky firms, only banks with low capital ratios tend to lend more and charge less during periods of high capital inflows. Financial stability concerns could arise, but they are limited as even low-capital banks are above the regulatory minimum. |
| Keywords: | credit registry data, international capital flows, bank lending, SME financing. |
| JEL: | E0 F0 F1 |
| Date: | 2022–11 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:1051&r=fdg |
| By: | Aleksandr V. Gevorkyan; Tarron Khemraj (Schwartz Center for Economic Policy Analysis (SCEPA)) |
| Abstract: | The paper assesses the effects of dominant currency shocks (strong US dollar) on emerging markets by studying exchange market pressure (EMP) or foreign exchange (FX) liquidity, GDP growth, external debt, and inflation. The literature emphasizes inflation passthrough, trade volume and GDP growth contraction in the periphery following a strong dollar. Comparing the dollar shock with euro and commodity price shocks and employing pooled mean group estimates and panel VAR across regimes of trade invoicing, this paper shows that bilateral depreciation can decrease FX liquidity and GDP growth in the periphery, failing to achieve the conventional macroeconomic adjustments of a competitive depreciation. A strong dollar reduces external debt, but strong euro has the opposite effect, implying circumvention of the ‘original sin.’ An EMP, FX liquidity, shock from the periphery appreciates the US dollar, affirming dollar’s safehaven status. These findings have implications for balance of payments and exchange rate policy management. |
| Keywords: | dominant currency pricing, exchange market pressure, international monetary system, nominal spillovers |
| JEL: | E24 I14 J62 J38 E21 J83 J32 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:epa:cepawp:2022-01&r=fdg |
| By: | Manuel Agosin; Juan D. Diaz-Maureira |
| Abstract: | This paper shows that the real exchange rate (RER) is more volatile in emerging and developing economies than in advanced countries. This stylized fact is well explained by the correlation coefficient between gross capital inflows (increases in liabilities with the rest of the world) and gross capital outflows (increases in assets held by domestic agents in the rest of the world). This correlation (with increases both in foreign liabilities and assets expressed as positive magnitudes) is much higher in advanced economies than in emerging and developing economies. We find a negative relationship between the correlation coefficient of gross inflows and outflows, on the one hand, and real exchange volatility, on the other. This finding is robust to various estimation procedures and to changes in the definition of RER volatility. |
| Date: | 2022–11 |
| URL: | http://d.repec.org/n?u=RePEc:udc:wpaper:wp539&r=fdg |
| By: | Ablam Estel Apeti (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne) |
| Abstract: | Based on a sample of 76 developing countries over 1990-2019, we assess the effect of adopting mobile money on consumption volatility using entropy balancing. We reveal that countries with mobile money exhibit lower consumption volatility. After checking the robustness of this result, we show that the key drivers of mobile money's stabilizing effect are financial inclusion and migrant remittances. Heterogeneity tests conducted indicate the sensitivity of the result to time and type of mobile money and to some structural factors, including trade openness, inflation, rural population, the rule of law, and level of development. |
| Keywords: | Mobile money,entropy balancing,consumption volatility,developing countries |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03819779&r=fdg |
| By: | Facundo Pastor (Universidad Argentina de la Empresa) |
| Abstract: | El objetivo de este trabajo es la elaboración de un índice que permita ordenar a ciertos países en función del grado de inclusión financiera que presentan. Para esto se realiza una estimación mediante el Análisis del Componente Principal en dos etapas. En la primera se elabora un índice para cada una de las dimensiones que, de acuerdo a la literatura, conforman a la inclusión financiera, como son el Acceso, el Uso y las Barreras. Luego se utilizan estos tres sub-índices para realizar nuevamente una estimación a través de PCA y conformar un solo índice que mida el grado de desarrollo que presenta la inclusión financiera en cada país. El resultado es la construcción de un índice ponderado que abarca a 113 países y que permite saber qué dimensiones son las más significativas, al tiempo que, al realizarse en dos etapas, también brinda información sobre el grado de desarrollo que presenta cada dimensión por separado. Una vez conformado el índice, se analiza la relación existente entre una la inclusión financiera y variables como la desigualdad y el empoderamiento femenino. |
| Keywords: | Index Number, Savings and Loan, Financial Access, Inclusión Financiera |
| JEL: | C43 G21 O16 |
| Date: | 2022–11 |
| URL: | http://d.repec.org/n?u=RePEc:aoz:wpaper:195&r=fdg |
| By: | Max Berre (Audencia Business School) |
| Abstract: | Venture capital investment is a key topic-of-interest in trade-investment ecosystems. While several studies explore the venture capital and start-up ecosystem examining valuations, relatively-few studies delve deeper into the role of macro-level economic factors in influencing start-up deals and valuations. Using a dataset of 1,089 venture-capital investments, containing 1,042 unique EU and EEA, this study examines macroeconomic, macro-sectoral, and macro-level institutional influences on the venture capital market landscape in European markets, finding that while local venture-capital market-size drives start-up valuations, as do growth and business cycle conditions, valuation-impacts show evidence of cross-border yield-chasing. Institutional factors meanwhile, impact valuations via both investors' home markets and acquisition-target markets, with investor-country taxes having the stronger valuation impact, whereas selfdealing regulation and non-tariff barriers can also impact startup-valuations. Valuation and venture capital markets driven by investor characteristics, by differences between investor and start-up, and by macro-level differences between the investor's market and the start-up's market. |
| Date: | 2022–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03834620&r=fdg |
| By: | Mohammad Reza Farzanegan (Marburg University); Ahmed M. Badreldin (Marburg University) |
| Abstract: | Studies on the relationship between religion and Entrepreneurship suggest that Islam discourages entrepreneurship. This is sometimes used to explain the excessively high unemployment figures for Muslim majority countries. However, we argue that studies that support this claim have missed a critical moderating factor, namely the presence of Shariah-compliant financing through Islamic banks. Using a multivariate regression analysis of 69 countries, our research shows empirically that the negative effect of Islam on entrepreneurship only applies in the absence of Shariah-compliant access to finance. This negative effect disappears in the presence of Islamic banks, thus disproving the generalized claim that Islam discourages entrepreneurship and showing that Muslim majority countries with high unemployment would do well to encourage the establishment of Shariah-complaint modes of financing to allow inclusion of religious entrepreneurs who would otherwise be excluded from the economy. |
| Keywords: | Islam, Entrepreneurship, Islamic Finance, Islamic Banking, Financial development, New Business Formation, Shariah |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:202242&r=fdg |
| By: | Francis OSEI-TUTU (LaRGE Research Center, Université de Strasbourg); Laurent WEILL (LaRGE Research Center, Université de Strasbourg) |
| Abstract: | Borrower discouragement contributes to reduce access to credit worldwide. In this paper, we test the hypothesis that individualism influences discouragement of borrowers. We use data on borrower discouragement and individualism at the firm level for a large dataset of 32,000 firms from 59 countries. We find that firms in individualistic countries are less likely to be discouraged from applying for loans. We further find that individualistic norms reduce borrower discouragement through its impact on lower corruption in lending and weak informal support networks. Our results hold after controlling for other cultural dimensions, addressing potential endogeneity and sample selection issues. Thus, our findings provide evidence that individualism reduces borrower discouragement, thereby improving access to credit of firms. |
| Keywords: | individualism, collectivism, borrower discouragement, access to credit. |
| JEL: | G21 Z10 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:lar:wpaper:2022-06&r=fdg |
| By: | Jérémie BERTRAND (IESEG School of Management); Laurent WEILL (LaRGE Research Center, Université de Strasbourg) |
| Abstract: | We test the hypothesis that sunshine affects the discouragement of borrowing firms. Using a sample of about 45,000 firms from 124 countries, for the period 2010-2020, we find that higher sunshine is associated with a greater probability to be discouraged for the borrowing firm. We further establish that the discouraging impact of sunshine on the decision to apply for a loan is only observed in low latitude zones. We explain these findings by the fact that greater sunshine creates a negative mood in hot regions. Additional results suggest that managerial features affect the discouraging impact of sunshine. |
| Keywords: | access to credit, borrower discouragement, sunshine, developing countries. |
| JEL: | G21 G41 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:lar:wpaper:2022-05&r=fdg |
| By: | Mehmet Furkan Karaca, Mehmet Furkan Karaca (Michigan State University); Minetti, Raoul (Michigan State University, Department of Economics); Murro, Pierluigi (Luiss University) |
| Abstract: | This paper studies the dynamic process of credit reallocation and its interaction with aggregate innovative activity. To draw out theoretical predictions, we build a discrete time model to investigate the consequences of lenders’ decision on reallocating credit and borrowers’ choice on innovating. We show that an escalation in credit reallocation disrupts innovative activities. Using a novel dataset on bank balance sheets and the aggregate number of patents for Italy, we examine the effect of credit reallocation on innovation. We construct measures of credit reallocation and collect data on the aggregate number of patents as a measure of innovative activity across Italian provinces. We find that an increase in credit reallocation reduces innovative activity while aggregate credit growth helps to expand it. |
| Keywords: | Credit Market; Credit Reallocation; Technological Change; Innovation |
| JEL: | E44 G21 O30 |
| Date: | 2022–10–19 |
| URL: | http://d.repec.org/n?u=RePEc:ris:msuecw:2022_006&r=fdg |
| By: | Masami Imai (Department of Economics, Wesleyan University); Michiru Sawada (Department of Economics, Nihon University) |
| Abstract: | We examine whether a financial crisis impairs corporate innovation in the context of the 1997- 1998 crisis in Japan which features a sharp decline in bank credit, the collapse of multiple major banks, and the economy’s failure to revert back the pre-crisis growth trend. In order to explore causal mechanisms, we link together three separate pieces of firm-level longitudinal data sets: (1) patent counts from 1994-2003 as well as the number of future patent citations up until 2018 to measure the quantity and quality of innovation output, (2) dependence on intermediated funds, (3) financing relationships with the failed banks. We show that innovative outputs of firms that rely more heavily on bank finance fell more, and that bank dependence matters more for small firms. In addition, as compared to otherwise similar firms, a group of small firms which had long-term relationships with the failed banks exhibited a large, persistent decline in innovative outputs. Taken together, the results are consistent with the view that crisis-induced disruptions in the provision of intermediated funds have long-term effects on innovative capacity of the opaque, bank dependent firms. |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:wes:weswpa:2022-002&r=fdg |
| By: | Alperovych, Yan; Divakaruni, Anantha; Le Grand, François |
| Abstract: | We document public welfare spending as an important growth driver of FinTech lending. Examining the massive austerity-led cuts to local welfare spending initiated by the UK government in 2010, we show that the gradual uneven rollback of the local welfare state since then is strongly associated with a rise in demand for peer-to-peer (P2P) consumer loans among affected areas, primarily in areas facing more banking and digital exclusion. P2P loans issued in austerity-affected areas are more expensive compared to those issued in unaffected areas, consistent with the P2P platform’s risk pricing sensitivity to higher default rates in affected areas. Overall, our findings show that P2P lending, as an alternative means to household finance, can help smooth cuts in welfare transfers particularly among households in economically deprived areas. |
| Date: | 2022–07–21 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:atsk9&r=fdg |
| By: | Raphael Auer; Giulio Cornelli; Sebastian Doerr; Jon Frost; Leonardo Gambacorta |
| Abstract: | Prices for cryptocurrencies have undergone multiple boom-bust cycles, together with ongoing entry by retail investors. To investigate the drivers of crypto adoption, we assemble a novel database (made available with this paper) on retail use of crypto exchange apps at daily frequency for 95 countries over 2015–22. We show that a rising Bitcoin price is followed by the entry of new users. About 40% of these new users are men under 35, commonly identified as the most "risk-seeking" segment of the population. To establish a causal effect of prices on adoption, we exploit two exogenous shocks: the crackdown of Chinese authorities on crypto mining in mid2021 and the social unrest in Kazakhstan in early 2022. During both episodes price changes have a significant effect on the entry of new users. Results from a PVAR model corroborate these findings. Overall, back of the envelope calculations suggest that around three-quarters of users have lost money on their Bitcoin investments. |
| Keywords: | bitcoin, cryptocurrencies, cryptoassets, regulation, decentralised finance, DeFi, retail investment. |
| JEL: | E42 E51 E58 F31 G28 L50 O32 |
| Date: | 2022–11 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:1049&r=fdg |
| By: | Skander J. Van den Heuvel |
| Abstract: | The stringency of bank liquidity and capital requirements should depend on their social costs and benefits. This paper investigates their welfare effects and quantifies their welfare costs using sufficient statistics. The special role of banks as liquidity providers is embedded in an otherwise standard general equilibrium growth model. Capital and liquidity requirements mitigate moral hazard from deposit insurance, which, if unchecked, can lead to excessive credit and liquidity risk at banks. However, these regulations are also costly because they reduce the ability of banks to create net liquidity and can distort investment. Equilibrium asset returns reveal the strength of demand for liquidity, yielding two simple sufficient statistics that express the welfare cost of each requirement as a function of observable variables only. Based on U.S. data, the welfare cost of a 10 percent liquidity requirement is equivalent to a permanent loss in consumption of about 0.02%, a modest impact. Even using a conservative estimate, the cost of a similarly-sized increase in the capital requirement is roughly ten times as large. Even so, optimal policy relies on both requirements, as the financial stability benefits of capital requirements are found to be broader. |
| Keywords: | Capital requirements; Convenience yields; Banking; Welfare; Liquidity requirements; Sufficient statistics |
| JEL: | G28 G21 E44 |
| Date: | 2022–11–04 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2022-72&r=fdg |
| By: | International Monetary Fund |
| Abstract: | Mexico has had a robust financial system for many years. Banks have maintained high capital and liquidity buffers. However, the system provides less finance to the real economy than in peers. Mexico has experienced significant real GDP fluctuations since the Peso crisis but no major credit boom-bust cycles, given strong policy frameworks that have been further enhanced since the 2016 FSAP. The economy has strong external trade and financial linkages. These have been an important channel for transmitting global shocks. The financial system has been resilient to the COVID-19 pandemic, reflecting a mix of resumption in mobility and support from domestic and global policies. Buffers in the financial system have increased further during the pandemic. The key risk confronting Mexico is the first sustained and ongoing tightening of global liquidity conditions since the Global Financial Crisis. |
| Keywords: | bridge bank tool; Development bank; banking liquidity regulation committee; bank cash flow analysis result; liquidity stress test framework; climate finance strategy; Banco de México; bank solvency stress test result; Financial Sector Assessment Program; Commercial banks; Liquidity; Financial sector stability; Global |
| Date: | 2022–11–04 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:2022/335&r=fdg |
| By: | Nikolay Nenovsky (LEFMI - Laboratoire d’Économie, Finance, Management et Innovation - UR UPJV 4286 - UPJV - Université de Picardie Jules Verne); Dominique Torre (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015-2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur) |
| Abstract: | In summer 1931, the Austro-German banking crisis propagated in Romania and Bulgaria. In the Romanian case, the management of the crisis confronted three types of protagonists-politics, bankers and central bankers-and positions about the relevant attitude to adopt, in to avoid or not the Marmorosch Blank Bank bankruptcy. In Bulgaria, the management of the crisis was more consensual. The intervention of the Bulgarian National Bank allowed to refund the more important banks, while other 34 were declared bankrupt and smaller ones silently disappear. One of the largest banks in Bulgaria, Credit Bank, has been rescued. Archive documents, reports of participants and comments from contemporaries, emphasize the different conceptions of the function of lender of last resort by the different 1 The authors would like to acknowledge Hans-Michael Trautwein whose comments and remarks have helped to improve the quality of this text. They are also indebted to Valentin Fuscan and to the participants of the Conference |
| Keywords: | G33,lender of last resort,Balkan economic history,banking crisis,twin crises |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03815692&r=fdg |
| By: | Olivier Godechot (Sciences Po - Sciences Po); Paula Apascaritei; István Boza; Martin Hallsten; Lasse Henriksen; Are Hermansen; Feng Hou; Jiwook Jung; Alena Křížková; Zoltán Lippényi; Elvira Marta; Silvia Maja Melzer; Eunmi Mun; Halil Sabanci; Naomi Kodama; Max Thaning |
| Abstract: | We measure the size and evolution of the wage premium for a job in finance. In thirteen developed countries, wages, especially high wages, increased at a sustained pace in this sector during the 1990s and 2000s, contributing strongly to the increase in the share of the national top 1% and hence to inequality. The explanation of this gap by differences in talent is not enough. In France, salaries remain 25 to 30% higher once the effect of the diploma is deducted. We offer an alternative explanation based on the ability of employees to move financial activity with them from one firm to another. |
| Date: | 2021–10–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:spmain:hal-03363171&r=fdg |