Journal of Money, Credit & Banking

Reports major findings in the study of financial institutions, financial markets, monetary and fiscal policy, credit markets, money and banking.

Articles from Vol. 38, No. 7, October

Capital and Risk: New Evidence on Implications of Large Operational Losses
OPERATIONAL RISK HAS received increasing attention from both financial institutions and policymakers, as large losses have resulted in the failure, merger, or substantial equity price declines at a variety of well-known firms. Unauthorized trading...
Econometric Policy Evaluation and Inverse Control
MONETARY POLICY RULES are naturally amenable to modern econometric policy evaluation methods.... When using these methods, researchers first build a structural model of the economy, consisting of mathematical equations with estimated numerical parameter...
Efficient Pricing of Large Value Interbank Payment Systems
THIS PAPER ANALYZES the efficient pricing of large-value payment systems. These systems, which are used by banks and large financial service providers to channel payments to each other, have changed substantially over the last decade. In particular,...
Horizontal and Vertical Integration in Securities Trading and Settlement
1. INTRODUCTION 1.1 Securities Trading and Settlement Infrastructure in Europe and the United States THE EUROPEAN SECURITIES trading and settlement infrastructure is highly fragmented. In the 25 member states of the European Union (EU), there...
How Do Official Bailouts Affect the Risk of Investing in Emerging Markets?
NO SUBJECT IN THE DEBATE ON GLOBALIZATION and international institutions has suffered from a greater disconnect between policy debate and empirical literature than that of the "moral hazard" supposedly caused by international official rescues. Ever...
Labor Market Frictions, Indeterminacy, and Interest Rate Rules
A FUNDAMENTAL ISSUE in macroeconomics is whether a particular economic model is associated with a determinate equilibrium or not. If the equilibrium is indeterminate, business cycle fluctuations may be driven solely by self-fulfilling expectations,...
Macro Factors and the Affine Term Structure of Interest Rates
THE TERM STRUCTURE of interest rates and macroeconomic activity are closely related. Bond-traders and financial analysts often cite monetary policy as a major factor in term structure movements, and the bond market is sensitive and responds quickly...
Oil Prices, Monetary Policy, and Counterfactual Experiments
OIL PRICE INCREASES have preceded every recession since 1971. Each of these recessions has also been preceded by an increase in the federal funds rate (see Figure 1) Are these recessions caused by the spikes in oil prices or by a sharp tightening of...
Optimal Monetary Policy under Commitment with a Zero Bound on Nominal Interest Rates
THE LOW LEVELS OF NOMINAL interest rates experienced over the last years in major world economies has generated considerable interest in how monetary policy should be conducted in the presence of a zero lower bound on nominal interest rates. Nevertheless,...
Same Financial Development Yet Different Economic Growth-Why?
THE QUESTION AS TO WHETHER financial development stimulates economic growth or whether the reverse causation is at play has spurred a great deal of attention over the years. A more developed financial sector provides fertile ground for the allocation...
The Effect of Government Spending on Private Consumption: A Puzzle?
THERE HAS RECENTLY been a renewed interest in the way in which variations in government spending influence the business cycle. One particularly interesting finding of the empirical literature that has stirred some discussion is that in vector autoregressions...