Hedger of Last Resort: Evidence from Brazilian FX Interventions, Local Credit, and Global Financial Cycles

Abstract

BIS Working Papers are written by members of the Monetary and Economic Department of the Bank for International Settlements, and from time to time by other economists, and are published by the Bank. The papers are on subjects of topical interest and are technical in character. The views expressed in them are those of their authors and not necessarily the views of the BIS.This publication is available on the BIS website (www.bis.org).

The Wall Street Consensus in pandemic times: what does it mean for climate-aligned development?

“…Second, the WSC makes the Global South more susceptible to the global financial cycle. It directly promotes an increase in foreign portfolio investment which, as is well-documented, can be particularly susceptible to changes in global financial conditions (Rey 2015;Gonzalez et al 2019). Although market maker/swapper of last resort interventions can reduce this susceptibility, they cannot eliminate the adverse financial implications that capital outflows can have for the financing of climate mitigation and adaptation in the Global South.…”

The spatial distribution of population in Spain: An anomaly in European perspective

“…Códigos JEL: R10. 1 Allen and Arkolakis (2014) show that geographic location alone can explain at least 20% of the spatial variation in income across the United States. 2 According to Duranton and Turner (2018), most daily activities take place within an area of 10-km 2 that does not necessarily coincide with administrative areas.…”

Macroprudential policy and intra-group dynamics: The effects of reserve requirements in Brazil

“…This paper contributes to three main strands of literature. First, there is an evolving literature on the effectiveness of macroprudential policies (see e.g., Claessens et al, 2013, Haldane et al, 2014, studying the heterogeneous effects of macroprudential policy by relying on bank-level data (Acharya et al, 2019;Barbone Gonzalez et al, 2018;Buch and Goldberg, 2017;Epure et al, 2017). For instance, Aiyar et al (2014) use a sample of domestically-owned banks and foreign-owned branches and subsidiaries in the UK from 1998 to 2007 and find that stricter bank-specific capital regulation of domestic banks and foreign subsidiaries leaks to unregulated foreign branches, which increase their lending.…”