The paper compares the policy choices in current and past financial crises, given initial conditions and underlying causes, explains why choices varied, reviews the current state of financial and operational restructuring, and institutional reforms, and raises questions on the toolkit to be used for future financial crises. Given the general interest in the topic, yet also taking into account the still ongoing financial crisis and the difficulty to make firm conclusions, we consider a Staff D...

The proposed SDN, prepared by a team of MCM/LEG experts, analyses whether bail-in -- defined as a statutory power to recapitalize a distressed SIFI by converting and/or writing down its unsecured debt -- could be a useful complementary tool to other resolution powers. More specifically, the note studies the effectiveness of bail-in in achieving prompt bank recapitalization at the time of distress, discusses potential risks when a bail-in power is activated, and proposes design features to ...

This SDN revisits the debate on bank resolution regimes, first by presenting a simple model of bank insolvency that transparently describes the trade-off involved between bail-outs, bail-ins, and larger capital buffers. The note then looks for empirical evidence to assess the moral hazard consequences of bail-outs and the systemic spillovers from bail-ins.

Japan’s weak economic performance in the 1990s has had implications not only for its own people, but for the world economy more generally, given Japan’s importance as a trading partner and supplier of capital. Therefore, it is essential that Japan unlock its growth potential. The IMF has worked with the Japanese authorities to identify the policies needed to bring Japan’s economy out of its recent slump. This book contributes to this ongoing debate, whose major topics include the need for an ...

This book happens to be the authors treatise on inflation and his thesis on Inflation Targeting. The book discusses the remedies for inflation in general and inflation targeting in particular.

This volume contains country experiences explained by policy makers and studies by leading experts on causes and consequences of capital flows as well as policies to control these flows. It addresses portfolio flow issues central to open economies, especially emerging markets.

Sovereign wealth funds (SWFs) are state-owned investment funds with combined asset holdings that are fast approaching four trillion dollars. Recently emerging as a major force in global financial markets, SWFs have other distinctive features besides their state-owned status: they are mainly located in developing countries and are intimately tied to energy and commodities exports, and they carry virtually no liabilities and have little redemption risk, which allows them to take a longer-ter...

The note will make the case for a substantial increase in the VAT in Japan as a core measure of fiscal consolidation, assess its macroeconomic impact (on real activity and inflationary expectations), consider key elements in its design and implementation (dealing with the distributional consequences; ‘big-bang’ versus preannounced step increases); the importance of retaining a single rate and adopting compensating spending measures as needed) and a range of related issues (such as the pros...

The June 2008 issue tackles the crisis in financial markets in industrial countries from a number of angles. Articles look at the origins of the crisis in the subprime mortgage market in the United States and track its spillover into other markets. Then authors examine what can be done to prevent future crises. Other articles look at bank capital adequacy rules and Basel II, whether emerging markets and industrial economies are decoupling or converging, capital flows to low-income countries, ...

Longtime Brookings economist and former presidential adviser Barry Bosworth examines why saving rates in the United States have fallen so precipitously over the past quarter century, why the initial consequences were surprisingly benign, and how reduced saving will affect the future well-being of Americans.The Decline in Saving provides an extensive and unparalleled account of the complexity of present saving patterns, an issue made even more serious by the 200809 global ...

Straight Talk and solid retirement advice for all CanadiansIn the face of government changes, financial market volatility, and an aging workforce, Canadians are understandably concerned about the impact on their finances and their future retirement. This reassuring book debunks the generally-accepted claims about necessary savings rates, which can cause paranoia among those beginning to contemplate retirement. The authors offer greater insight into planning approac...