Essays in International Macro-Finance and Banking
This thesis examines the impact of various policy interventions in open economies aimed at mitigating disruptions in the financial sector and their effects on the broader economy. In the first chapter, I provide a stylized framework to study the role of the United States as the International Lender...
| Autor: | |
|---|---|
| Tipo de recurso: | tesis doctoral |
| Estado: | Versión publicada |
| Fecha de publicación: | 2024 |
| País: | España |
| Institución: | CBUC, CESCA |
| Repositorio: | TDR. Tesis Doctorales en Red |
| OAI Identifier: | oai:www.tdx.cat:10803/691988 |
| Acceso en línea: | http://hdl.handle.net/10803/691988 |
| Access Level: | acceso abierto |
| Palabra clave: | Macro-finance Banking 33 |
| Sumario: | This thesis examines the impact of various policy interventions in open economies aimed at mitigating disruptions in the financial sector and their effects on the broader economy. In the first chapter, I provide a stylized framework to study the role of the United States as the International Lender of Last Resort to global banks. I argue that a world with non-US global banks that borrow and invest in dollars is prone to self-fulfilling crises due to a two-way interaction between the exchange rate and the financial constraints of these banks. Furthermore, in the midst of a global crisis, non-US global banks struggle to raise funds and the dollar appreciates, making it difficult for domestic central banks to cover their liquidity needs. In contrast, the Fed could provide the necessary dollar liquidity, but it may not fully internalize the benefits of such intervention for the world, since the US enjoys higher and cheaper capital inflows during periods of global financial stress. The second chapter takes a step back and endogeneizes the portfolio allocation of these global banks. Despite borrowing and investing in domestic currencies and in dollars, these banks may still be exposed to fluctuations in the exchange rate due to maturity mismatches in dollars. If this intervention is anticipated, it incentivizes global banks to rely more on dollar funding and to increase their investments in US assets. This situation poses a challenge for central banks in other countries. The third chapter is dedicated to the interaction between macroprudential instruments in a small open economy.We study the optimal policy rules involving dynamic capital and reserve requirements and find that the gains from adapting them to economic conditions are substantial, especially if financial stability is included as an objective of the central bank. Contrary to capital requirements, an increase in reserve requirements leads to higher inflation and has an ambiguous impact on output. |
|---|