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Using an adaptation of the Uncovered Interest Parity (UIP) condition, this paper analyzes the drivers behind the large, symmetric exchange rate swings observed during the financial crisis of 2008-2010. Employing a Nelson-Siegel model, we estimate yield curves and decompose the exchange rate movements into changes we attribute to monetary policy and a residual. We find that the depreciation phase of the currencies in our sample was largely dominated by safe-haven effects rather than carry trade activity or other return considerations. For some countries, however, the appreciation that began at the end of 2008 seems largely to reflect downward movement in the cumulative revisions to nominal forward differentials, suggesting carry trade.

Currency crises --- Financial crises --- Currency question --- Foreign exchange --- Econometric models. --- Banks and Banking --- Financial Risk Management --- Foreign Exchange --- Money and Monetary Policy --- Interest Rates: Determination, Term Structure, and Effects --- Current Account Adjustment --- Short-term Capital Movements --- Open Economy Macroeconomics --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Financial Crises --- Currency --- Monetary economics --- Finance --- Economic & financial crises & disasters --- Exchange rates --- Currencies --- Exchange rate adjustments --- Interest rate parity --- Money --- Financial services --- Interest rates --- United States

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Banks across the Caribbean have lost important Correspondent Banking Relationships (CBRs). The macroeconomic impact has so far been limited, in part because banks either have multiple relationships or have been successful in replacing lost CBRs. However, the cost of services has increased substantially, some services have been cut back, and some sectors have experienced reduced access. Policy options to address multiple drivers, including lower profitability and risk aversion by global banks, require tailored actions by several stakeholders.

Banks and Banking --- Criminology --- Taxation --- Central Banks and Their Policies --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Financial Institutions and Services: Government Policy and Regulation --- Tax Evasion and Avoidance --- Technological Change: Choices and Consequences --- Diffusion Processes --- Economywide Country Studies: Latin America --- Caribbean --- International Lending and Debt Problems --- Illegal Behavior and the Enforcement of Law --- Banking --- Corporate crime --- white-collar crime --- Public finance & taxation --- Correspondent banking --- Anti-money laundering and combating the financing of terrorism (AML/CFT) --- Offshore financial centers --- Commercial banks --- Financial services --- Crime --- Financial institutions --- Compliance costs --- Revenue administration --- Banks and banking --- Correspondent banks --- Money laundering --- International finance --- Tax administration and procedure --- Belize --- White-collar crime

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The high level of nonperforming loans (NPLs) in the Caribbean has been, in large part, a legacy of the global financial crisis, but their persistence owes much to the weak economic recovery in the region, as well as to structural obstacles to their resolution. A comprehensive strategy is needed to address these impediments to sever the adverse feedback loops between weak economic activity and weak asset quality. This paper finds that NPLs are a drag on Caribbean growth and macro-financial links are strong: a deterioration in asset quality hinders bank lending and dampens economic activity, undermining, in turn, efforts to resolve problem loans. A multifaceted approach is needed, involving a combination of macro- economic policies to support growth and employment; strong supervisory frameworks to ensure macro-financial stability and create incentives for resolution; efforts to address informational gaps and deficiencies in insolvency and debt-enforcement frameworks; and development of markets for distressed loans. The institutional capacity constraints require coordination of reforms within the region and support from international organizations through capacity-building.

Antigua and Barbuda. --- Antigua & Barbuda --- Antigua --- Barbuda --- Banks and Banking --- Finance: General --- Money and Monetary Policy --- Industries: Financial Services --- Business Fluctuations --- Cycles --- Financial Markets and the Macroeconomy --- Money Supply --- Credit --- Money Multipliers --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- General Financial Markets: Government Policy and Regulation --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Finance --- Banking --- Monetary economics --- Nonperforming loans --- Loans --- Distressed assets --- Financial institutions --- Financial sector policy and analysis --- Money --- Collateral --- Banks and banking --- Bahamas, The

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