Archive for April 20th, 2022

The importance of technology in banking during a crisis

April 20, 2022

Nicola Pierri and Yannick Timmer in this Federal Reserve paper show that more tech oriented banks do better in a crisis:

What are the implications of information technology (IT) in banking for financial stability? Data on US banks’ IT equipment and the background of their executives reveals that higher pre-crisis IT adoption led to fewer non-performing loans and more lending during the global financial crisis. Empirical evidence indicates a direct role of IT adoption in strengthening bank resilience; this includes instrumental variable estimates exploiting the historical location of technical schools. Loan-level analysis shows that high-IT banks originated mortgages with better performance, indicating better borrower screening. No evidence points to offloading of low-quality loans, differences in business models, or enhanced monitoring.

Posted in Academic research & research papers, Central Banks / Monetary Policy, Economics - macro, micro etc, Financial Markets/ Finance | Leave a Comment »

Economic spillovers from the war in Ukraine: The proximity penalty

April 20, 2022

Jonathan Federle, André Meier, Gernot Müller and Victor Sehn in this voxeu research show that countries which were nearer to Ukraine were impacted more:

The economic impact of global disasters differs vastly across space. The stock market reaction to the Russian invasion of Ukraine illustrates this clearly. This column compares the cumulative equity returns in 66 countries during a four-week window centred around 24 February 2022. The authors find a large ‘proximity penalty’ worth about 2.6 percentage points for every 1,000 kilometres a country is closer to Ukraine. Trade-related spillovers account for about two-thirds of this penalty. 

 

Posted in Academic research & research papers, Economics - macro, micro etc, Financial Markets/ Finance | Leave a Comment »

Freedom For Sale: How We Made Money and Lost Our Liberty

April 20, 2022

John Kampfner, Editor of the New Statesman magazine from 2005-2008, wrote a book in 2010 titled:  Freedom For Sale: How We Made Money and Lost Our Liberty. Other editions also titled differently as: Freedom for Sale: Why the World Is Trading Democracy for Security.

I just came across the book and it makes for a riveting read. Book abstract:

Democratic liberalism v. authoritarianism — the ideological divide that defined the twentieth century. But when the cold war ended, “the end of history”; was proclaimed. Soon the fire of freedom would burn worldwide, the experts said. And where markets were freed, human rights would inevitably follow.

Or not. In the last twenty years, nations including India, Russia, China and the United Arab Emirates have disproved the idea that capitalism and democracy are inextricably linked. Emerging middle classes have proven themselves all too willing to sacrifice certain democratic rights — including free speech, an open media, and free elections — in exchange for prosperity. But they are not alone. We are all doing it. Alarmingly, Western democracy has adopted some of the attributes of that authoritarianism.

Combining boots on the ground reporting with incisive analysis, award-winning journalist John Kampfner describes this alarming trend — one which has only been exacerbated by the global economic meltdown — and what citizens must do to counter it.

Despite being written more than a decade ago, the book remains relevant to understand today’s times and how we got where we are today..

Posted in Academic research & research papers, Book Review | Leave a Comment »

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