Financial institutions

Model-based regulation: lending in times of Covid

12/20/2022 European Central Bank Central banks

When the coronavirus (COVID-19) pandemic struck, it was vital for many firms to retain access to funding from banks. In order to calculate their capital requirements, banks measure borrowers’ credit risk using either “their own”, internal ratings-based (IRB) models, or a standardised approach. This analysis examines whether model-based bank regulation constrained lending during the COVID-19 crisis. Results show that banks using their own models extended less credit than banks using a standardised approach.

Debt specialisation and diversification: International evidence

02/17/2021 BIS International

We uncover a strong U-shape in bond financing by US firms. Firms with total debt in the range of $10 million to $100 million tend to use much less bond financing relative to loan financing than do firms with more or less total debt.

Do macroprudential policies affect non-bank financial intermediation?

02/11/2021 BIS International

We analyse how macroprudential policies (MaPs), largely applied to banks and to a lesser extent borrowers, affect non-bank financial intermediation (NBFI).

Fintech regulation: how to achieve a level playing field

02/02/2021 BIS International

Fintech regulation: how to achieve a level playing field - Occasional Papers No 17, February 2021

Answering the Queen: Machine learning and financial crises

02/01/2021 BIS International

Financial crises cause economic, social and political havoc. Macroprudential policies are gaining traction but are still severely under-researched compared to monetary policy and fiscal policy. We use the general framework of sequential predictions also called online machine learning to forecast crises out-of-sample.

What 31 provinces reveal about growth in China

01/28/2021 BIS International

It is important to understand the growth process under way in China. However, analyses of Chinese growth became increasingly more difficult after the real GDP doubling target was announced in 2012 and the official real GDP statistics lost their fluctuations. With a dataset covering 31 Chinese provinces from two decades, we have substantially more variation to work with.

Permissioned distributed ledgers and the governance of money

01/27/2021 BIS International

We explore the economics and optimal design of "permissioned" distributed ledger technology (DLT) in a credit economy. Designated validators verify transactions and update the ledger at a cost that is derived from a supermajority voting rule, thus giving rise to a public good provision game.

Model-based regulation: lending in times of Covid

Debt specialisation and diversification: International evidence

Do macroprudential policies affect non-bank financial intermediation?

Fintech regulation: how to achieve a level playing field

Answering the Queen: Machine learning and financial crises

What 31 provinces reveal about growth in China

Permissioned distributed ledgers and the governance of money

Ready, steady, go? - Results of the third BIS survey on central bank digital currency

Minimum haircut floors for securities financing transactions

Optimal bank leverage and recapitalization in crowded markets

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