Inflation targeting: Is IT to blame for banking system instability?

Fazio, Dimas M.; Tabak, Benjamin Miranda; Cajueiro, Daniel O.

doi:10.1016/j.jbankfin.2015.05.016

Cited by 55 publications

(28 citation statements)

References 61 publications

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“…Other insights were the relation between financial risk and economic development (Calmès & Theoret, 2014;Lupu, 2015;Fazio et al, 2015;Fernández et al, 2016).…”

Section: Quantitative Analysis In Financial Regulationmentioning

confidence: 99%

Machine Learning Methods for Systemic Risk Analysis in Financial Sectors

Kou

Chao

Alsaadi

et al. 2019

Technological and Economic Development of Economy

254

122

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Financial systemic risk is an important issue in economics and financial systems. Trying to detect and respond to systemic risk with growing amounts of data produced in financial markets and systems, a lot of researchers have increasingly employed machine learning methods. Machine learning methods study the mechanisms of outbreak and contagion of systemic risk in the financial network and improve the current regulation of the financial market and industry. In this paper, we survey existing researches and methodologies on assessment and measurement of financial systemic risk combined with machine learning technologies, including big data analysis, network analysis and sentiment analysis, etc. In addition, we identify future challenges, and suggest further research topics. The main purpose of this paper is to introduce current researches on financial systemic risk with machine learning methods and to propose directions for future work.

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“…Other insights were the relation between financial risk and economic development (Calmès & Theoret, 2014;Lupu, 2015;Fazio et al, 2015;Fernández et al, 2016).…”

Section: Quantitative Analysis In Financial Regulationmentioning

confidence: 99%

Machine Learning Methods for Systemic Risk Analysis in Financial Sectors

Kou

Chao

Alsaadi

et al. 2019

Technological and Economic Development of Economy

254

122

View full text Add to dashboard Cite

show abstract

“…To overcome this problem, reference [28] included only non-IT countries with real per capita GDP at least as large as that of the poorest country with IT active in the control group. The same recommendation was made by the authors of reference [29] when studying whether banks in IT countries are less resilient and more fragile to financial risks in comparison with banks from non-IT countries.…”

Section: The Datamentioning

confidence: 92%

Assessing the Sustainability of Inflation Targeting: Evidence from EU Countries with Non-EURO Currencies

Străchinaru

Dumitrescu

2019

Sustainability

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This paper examines the impact of inflation targeting (IT) adoption on macroeconomic outcomes (unemployment, inflation, exchange rate, and its volatility) and banking concentration by comparing the non-EUR European countries that adopt an IT strategy to non-EUR European countries that do not adopt an IT strategy for the period of 2005–2015. The results suggest that IT has no impact on inflation, unemployment, and the exchange rate raises the systemic risk. Moreover, in non-IT countries, central banks are more concerned to minimizing the exchange rate volatility to better protect the debtors with foreign currency (EURO) loans.

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“…This field of study has expanded by recent studies like those of (Fazio et al 2014(Fazio et al , 2015 who studied the impact of inflation targeting on banking system stability, measured by a Z-score calculated for a sample of 5500 commercial banks operating in 70 countries (22 targeters and 48 non-targeters) observed from 1998 to 2012. The authors proved that inflation targeters dispose of a more stable banking system than non-targeting ones.…”

Section: Literature Reviewmentioning

confidence: 99%

Revisiting the Nexus Between Inflation Targeting and the Build-Up of the Financial Imbalances

Bogari¹

2020

AEF

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The outbreak of the recent global financial crisis in 2007-2008 of the most developed economies, has spurred criticism that inflation targeting central banks may have neglected the build-up of financial imbalances. In other words the global financial and economic crisis highlights that central banks should be more effective in mastering financial instability, and should achieve an explicit goal of financial stability beyond their traditional emphasis on low inflation. In this paper, we aim to assess whether inflation targeting (IT) actually mattered as regards financial stability. Our empirical evidence has been conducted on a group of 41 emerging economies from which 20 economies adopt Inflation Targeting policy and 21 non Inflation Targeting economies as a group of control, over the period 2000-2017. To do this, we evaluate the time varying treatment effect of the IT's adoption on the banking system stability. Additionally using a variety of propensity score matching methods, we show that, on average inflation targeting has an insignificant effect on lowering banking system instability.

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Inflation targeting: Is IT to blame for banking system instability?

Cited by 55 publications

References 61 publications

Machine Learning Methods for Systemic Risk Analysis in Financial Sectors

Machine Learning Methods for Systemic Risk Analysis in Financial Sectors

Assessing the Sustainability of Inflation Targeting: Evidence from EU Countries with Non-EURO Currencies

Revisiting the Nexus Between Inflation Targeting and the Build-Up of the Financial Imbalances

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