eepening Nigeria‘s financial markets is a key component of economic diversification and job creation. An efficient and functioning market for credit will stimulate business activity and support Nigeria‘s dynamic entrepreneurs. There is a prevalent feeling that following the banking sector crisis which erupted in August 2009, this process has stalled as commercial banks have curtailed their lend...

T his special issue of the Economic Quarterly is dedicated to the 1983 model of bank runs developed by Douglas Diamond and Philip Dybvig.1 Their model has been a workhorse of banking research over the last 25 years and during the recent financial crisis it has been one that researchers and policymakers consistently turn to when interpreting financial market phenomena. The Diamond-Dybvig model h...

The session focused upon several issues raised by Mr Anand Sinha in the context of both advanced and emerging market economies (EMEs). Keeping in view, broader interlinkages between the financial sector and the real sector, the need for better coordination between financial regulation and macroeconomic policies for sustaining growth was emphasized. Given the nature and origin of the recent cris...

 This paper investigates the financial stability, measured by z-score technique in Islamic banking system of 20 countries from 2000 to 2010. We compare the stability of Islamic banks to the commercial banks, before and after the financial crisis. The empirical results from panel estimation show that: a) the large Islamic banks are more stable than the large commercial banks and furthermo...

In the aftermath of the global financial crisis (2007-2009), policymakers in the developing countries and emerging economies have generally relied on macroprudential policies to achieve financial stability. Since the banking systemchr('39')s vulnerability plays an essential role in financial instability, and the banking systemchr('39')s stability is exposed to vulnerability, we examine macropru...

It is a pleasure for me to attend the SEACEN-CEMLA Conference, as it offers me a new opportunity to describe and explain to my esteemed colleagues from other parts of the world the experience of the ECB’s monetary policy over the past four years of crisis. I would also like to take the opportunity to discuss with you what I consider to be some of the main challenges that modern central banking ...

The banking crisis has caused a resurgence of interest in behavioural models of expectations in macroeconomics. Here we evaluate behavioural and rational expectations econometrically in a New Keynesian framework, using US post-war data and the method of indirect inference. We …nd that after full reestimation the model with behavioural expectations is strongly rejected by the data, whereas the s...

A milestone in European integration was achieved when the third and final stage of EMU began on January 1, 1999, with the introduction of the euro. This annex provides a progress report on several aspects of EMU: European financial market integration; implementation and performance of the EMU payments and securities settlement systems; the outlook for pan-European capital markets; banking syste...

The earlier 2007/2008 financial crisis generated the main lessons for monetary policy, notably that price stability does not necessarily guarantee financial stability. Nevertheless, the on-going Eurozone crisis has pointed to further lessons, notably that a single currency covering diverse states does need a Banking Union; and to problems of zero risk-weighting for sovereign debts. Without such...

This paper compares the stability of the US Dual Banking system’s two bank groups, national and state banks, in light of the current financial crisis. The goal of the paper is to answer three distinct questions: first, is there a difference in the (balance sheet-) fragility between the two groups and, second, to what extent has the balance sheet fragility of both groups changed after the beginn...