Series: IMF Working Papers
Author(s): Mario Catalan , and Alexander Hoffmaister
Publisher: INTERNATIONAL MONETARY FUND
Publication Date: 29 May 2020
Keywords: Financial crises, Bank credit, Interest rates on loans, Market interest rates, Interest rate differential, Stress tests, macroeconomic shocks, banking sector, modeling, WP
In the presence of adverse macroeconomic shocks, simultaneous capital losses in multiple banks can prompt them to contract their balance sheets. These bank responses generate externalities that propagate in the for...