Procyclicality and Monetary Aggregates / Hyun Song Shin, Kwanho Shin.

Format:

Book

Author/Creator:

Shin, Hyun Song.

Contributor:

National Bureau of Economic Research.

Shin, Kwanho.

Series:

Working Paper Series (National Bureau of Economic Research) no. w16836.

NBER working paper series no. w16836

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2011.

Summary:

Financial intermediaries borrow in order to lend. When credit is increasing rapidly, the traditional deposit funding (core liabilities) is supplemented with other funding (non-core liabilities). We explore the hypothesis that monetary aggregates reflect the size of non-core and core liabilities and hence convey information on the stage of the financial cycle. In emerging economies with open capital markets, non-core liabilities of the banking system take the form of short-term foreign exchange liabilities, increasing the vulnerability to the outbreak of "twin crises" where a liquidity crisis is compounded by a currency crisis.

Notes:

Print version record

February 2011.