nep-ifn New Economics Papers
on International Finance
Issue of 2017‒05‒14
two papers chosen by
Vimal Balasubramaniam
University of Oxford

  1. Changing business models in international bank funding By Gambacorta, Leonardo; Schiaffi, Stefano; van Rixtel, Adrian
  2. Global value chains and effective exchange rates at the country-sector level By Nikhil Patel; Zhi Wang; Shang-Jin Wei

  1. By: Gambacorta, Leonardo; Schiaffi, Stefano; van Rixtel, Adrian
    Abstract: This paper investigates the foreign funding mix of globally active banks. Using BIS international banking statistics for a panel of 12 advanced economies, we detect a structural break in international bank funding at the onset of the global financial crisis. In their post-break business model, banks rely less on cross-border liabilities and, instead, tap funds from outside their jurisdictions by making more active use of their subsidiaries and branches, as well as inter-office accounts within the same banking group.
    Keywords: bank funding; International Banks; structural reform initiatives
    JEL: C32 F65 G21
    Date: 2017–04
  2. By: Nikhil Patel; Zhi Wang; Shang-Jin Wei
    Abstract: The real effective exchange rate (REER) is one of the most cited statistical constructs in open-economy macroeconomics. We show that the models used to compute these numbers are not rich enough to allow for the rising importance of global value chains. Moreover, because different sectors within a country participate in international production sharing at different stages, sector level variations are also important for determining competitiveness. Incorporating these features, we develop a framework to compute REER at both the sector and country level and apply it on inter-country input-output tables to study the properties of the new measures of REER for 35 sectors in 40 countries.
    Keywords: global value chains, real effective exchange rate measurement
    JEL: F1 F3 F4 F6
    Date: 2017–05

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