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Europe > Norway

You are looking at 1 - 6 of 6 items for :

  • Type: Journal Issue x
  • Liquidity; Economics x
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Cover Regional Economic Outlook, October 2020, Europe
Regional Economic Outlook, October 2020, Europe
Whatever It Takes: Europe’s Response to COVID-19
International Monetary Fund. European Dept.

Abstract

The COVID-19 pandemic has caused dramatic loss of human life and major damage to the European economy, but thanks to an exceptionally strong policy response, potentially devastating outcomes have been avoided.

Keywords:
lockdowns; pandemic; corporate liquidity; recovery; reopening; economic outlook; forecasting; REO; policy support; infection curve; job retention program; Europe transform; financial market disruption; pandemic economy; solvency risks in Europe; time trend; reopening indices; infection incidence; reinfection risk; infection rate; credit access; containment policy; COVID-19; Liquidity; Solvency; Infrastructure; Europe; Global
Cover IMF Staff Country Reports
Norway: Financial Sector Assessment Program-Technical Note-Systemic Liquidity
International Monetary Fund. Monetary and Capital Markets Department
Norwegian banks and other financial institutions rely heavily on capital markets for liquidity and risk management. Liquidity conditions in the Norwegian financial sector are affected by central bank operations and the lending and funding activities of financial institutions, both domestically and abroad. Nearly 40 percent of the funding of Norwegian banks is obtained from market sources, using commercial paper, covered bonds, and senior unsecured bonds issued both domestically and abroad. Correspondingly, money markets, foreign exchange (FX) swap markets and bond markets are crucial to the credit intermediation process and a dislocation in these markets—the inability of financial institutions to roll over, or obtain new, funding—could have significant consequences for financial stability. Against this background, this note analyzes core funding markets for Norwegian banks and assesses Norges Bank’s capacity to manage systemic liquidity conditions and counteract liquidity shocks in normal times and in times of stress.
Keywords:
ISCR; CR; spot market; commercial paper; cross holdings; FX swap market; liquidity support; government bond; central bank; U.S. dollar; secondary market; mortgage loan; government bond market; market development; Liquidity; Covered bonds; Currency swaps; Sovereign bonds; Collateral; Global
Cover IMF Working Papers
Procyclical Behavior of Institutional Investors During the Recent Financial Crisis: Causes, Impacts, and Challenges
Mr. Michael G. Papaioannou
,
Mr. Joonkyu Park
,
Jukka Pihlman
, and
Han van der Hoorn
This paper (i) provides evidence on the procyclical investment behavior of major institutional investors during the global financial crisis; (ii) identifies the main factors that could account for such behavior; (iii) discusses the implications of procyclical behavior; and (iv) proposes a framework for sound investment practices for long-term investors. Such procyclical investment behavior is understandable and may be considered rational from an individual institution’s perspective. However, our main conclusion is that behaving in a manner consistent with longterm investing would lead to better long-term, risk-adjusted returns and, importantly, could lessen the potential adverse effects of the procyclical investment behavior of institutional investors on global financial stability.
Keywords:
WP; flight to quality; investment behavior; long-term investor; risk tolerance; asset owner; hedge fund; individual investor; investment horizon; sovereign investor; Financial crisis; long-term investments; institutional investors; procyclicality; asset allocation; asset class; endowment fund; Pension spending; Asset allocation; Liquidity; Mutual funds; Global
Cover IMF Working Papers
Money and Collateral
Mr. Manmohan Singh
and
Mr. Peter Stella
Between 1980 and before the recent crisis, the ratio of financial market debt to liquid assets rose exponentially in the U.S. (and in other financial markets), reflecting in part the greater use of securitized assets to collateralize borrowing. The subsequent crisis has reduced the pool of assets considered acceptable as collateral, resulting in a liquidity shortage. When trying to address this, policy makers will need to consider concepts of liquidity besides the traditional metric of excess bank reserves and do more than merely substitute central bank money for collateral that currently remains highly liquid.
Keywords:
WP; central bank money; financial market; transmission mechanism; interest rate; market practice; Money; collateral; liquidity; financial crisis; securitization; central bank; party repo market; depository liability; Fed holding; Fed-Treasury accord; market clearing; FR note; Monetary base; Currencies; Bank deposits; Global
Cover Policy Papers
Borrowing Agreement with Norges Bank
International Monetary Fund
This paper presents for the approval of the Executive Board a draft borrowing agreement between Norges Bank and the Fund. On March 28, the Finance Minister of Norway announced that the Ministry of Finance and Norges Bank (the central bank of Norway) were exploring a possible Norwegian contribution of up to 30 billion Norwegian kroner (about US$4.5 billion or SDR 3 billion) of financial resources to the IMF to support the Fund’s ability to provide timely and effective balance of payments assistance to its members in the current crisis. Staff and Norges Bank representatives have now reached agreement on a draft borrowing agreement, the text of which is set forth in the Attachment (“the Agreement”).
Keywords:
PP; agreement; Japan agreement; Japan; fund; borrowing agreement; agreement of Norges Bank; draft agreement; term of the agreement; NAB decision; Balance of payments assistance; Lines of credit; Liquidity management; SDR interest rate; Resource management in revenue administration
Cover IMF Working Papers
The Use of Blanket Guarantees in Banking Crises
Mr. Luc Laeven
and
Mr. Fabian Valencia
In episodes of significant banking distress or perceived systemic risk to the financial system, policymakers have often opted for issuing blanket guarantees on bank liabilities to stop or avoid widespread bank runs. In theory, blanket guarantees can prevent bank runs if they are credible. However, guarantee could add substantial fiscal costs to bank restructuring programs and may increase moral hazard going forward. Using a sample of 42 episodes of banking crises, this paper finds that blanket guarantees are successful in reducing liquidity pressures on banks arising from deposit withdrawals. However, banks' foreign liabilities appear virtually irresponsive to blanket guarantees. Furthermore, guarantees tend to be fiscally costly, though this positive association arises in large part because guarantees tend to be employed in conjunction with extensive liquidity support and when crises are severe.
Keywords:
WP; liquidity support; bank; guarantee