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Data and Code for "Do Sounder Banks Make Calmer Waters? The Link Between Bank Regulations and Capital Flow Waves

Version
2
Resource Type
Dataset
Creator
  • Forbes, Kristin (MIT-Sloan School of Management)
Publication Date
2020-01-01
Free Keywords
prudential regulation; macroprudential regulation; capital flows; sudden stops; surges; risk factors; global financial cycle; extreme capital flow episode
Description
  • Abstract

    This paper tests if prudential and macroprudential regulations have meaningfully reduced the incidence of capital flow “waves”, i.e., of sudden stops and surges of capital flows from abroad. The results support other work documenting changes since 2008 in how global factors affect capital flows, but provide mixed evidence on how regulations have affected the incidence of sharp capital flow movements. Regulations that strengthen banks (such as higher capital-asset ratios) meaningfully reduce the incidence of surges, but tighter macroprudential regulations appear to have done little to reduce the incidence of capital flow waves—and are even correlated with an increased risk of sudden stops. This may reflect their limited use to date, or how they interact with different types of capital flows. Macroprudential regulations may have reduced the volume and volatility of bank flows, but shifted financial intermediation outside the regulated sector and thereby increased the volatility of debt and equity flows. These reforms could still provide important benefits, however, in terms of building the resilience of banks and thereby mitigating the negative effects of capital flow waves on the broader economy. Even if the waters are not much calmer, the waves should do less damage.
Availability
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Relations
  • Is cited by
    DOI: 10.1016/j.jinteco.2012.03.006 (Text)
Publications
  • Forbes, Kristin J., and Francis E. Warnock. “Capital Flow Waves: Surges, Stops, Flight, and Retrenchment.” Journal of International Economics 88, no. 2 (November 2012): 235–51. https://doi.org/10.1016/j.jinteco.2012.03.006.
    • ID: 10.1016/j.jinteco.2012.03.006 (DOI)

Update Metadata: 2020-02-12 | Issue Number: 1 | Registration Date: 2020-02-12

Forbes, Kristin (2020): Data and Code for "Do Sounder Banks Make Calmer Waters? The Link Between Bank Regulations and Capital Flow Waves. Version: 2. ICPSR - Interuniversity Consortium for Political and Social Research. Dataset. https://doi.org/10.3886/E117082V2